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Complete the following in WileyPLUS:
- Brief Exercise 19-2
- Brief Exercise 19-6
- Brief Exercise 19-11
- Brief Exercise 19-14
- Exercise 19-6
- Exercise 19-8
- Exercise 19-17
- Exercise 19-20
- Exercise 19-24
Brief Exercise 19-2
Pina Corporation began operations in 2017 and reported pretax financial income of $228,000 for the year. Pina’s tax depreciation exceeded its book depreciation by $38,000. Pina’s tax rate for 2017 and years thereafter is 30%. In its December 31, 2017, balance sheet, what amount of deferred tax liability should be reported?
Brief Exercise 19-6
At December 31, 2017, Sandhill Inc. had a deferred tax asset of $30,200. At December 31, 2018, the deferred tax asset is $57,200. The corporation’s 2018 current tax expense is $59,100.
What amount should Sandhill report as total 2018 income tax expense?
Brief Exercise 19-11
At December 31, 2017, Sarasota Corporation had a deferred tax liability of $746,200, resulting from future taxable amounts of $1,820,000 and an enacted tax rate of 41%. In May 2018, a new income tax act is signed into law that raises the tax rate to 46% for 2018 and future years.
Prepare the journal entry for Sarasota to adjust the deferred tax liability.
Brief Exercise 19-14
Bridgeport Inc. incurred a net operating loss of $483,000 in 2017. Combined income for 2015 and 2016 was $324,000. The tax rate for all years is 30%. Bridgeport elects the carryback option. Assume that it is more likely than not that the entire net operating loss carryforward will not be realized in future years.
Prepare all the journal entries necessary at the end of 2017.
Listed below are items that are commonly accounted for differently for financial reporting purposes than they are for tax purposes.
For each item below, indicate whether it involves:
(1) A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset.
(2) A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability.
(3) A permanent difference.
Exercise 19-8 (Part Level Submission)
Cheyenne Company has the following two temporary differences between its income tax expense and income taxes payable.
Assuming there were no temporary differences prior to 2017, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, 2018, and 2019.
Indicate how deferred taxes will be reported on the 2019 balance sheet. Cheyenne’s product warranty is for 12 months
Novak Co. establishes a $126,000,000 liability at the end of 2017 for the estimated site-cleanup costs at two of its manufacturing facilities. All related closing costs will be paid and deducted on the tax return in 2018. Also, at the end of 2017, the company has $63,000,000 of temporary differences due to excess depreciation for tax purposes, $8,820,000 of which will reverse in 2018.
The enacted tax rate for all years is 40%, and the company pays taxes of $80,640,000 on $201,600,000 of taxable income in 2017. Novak expects to have taxable income in 2018.
Exercise 19-20 (Part Level Submission)
The differences between the book basis and tax basis of the assets and liabilities of Crane Corporation at the end of 2016 are presented below.
It is estimated that the litigation liability will be settled in 2017. The difference in accounts receivable will result in taxable amounts of $32,200 in 2017 and $13,400 in 2018. The company has taxable income of $325,000 in 2016 and is expected to have taxable income in each of the following 2 years. Its enacted tax rate is 34% for all years. This is the company’s first year of operations. The operating cycle of the business is 2 years.
Exercise 19-24 (Part Level Submission)
Bramble Inc. reports the following pretax income (loss) for both book and tax purposes. (Assume the carryback provision is used where possible for a net operating loss.)
Prepare the journal entries for years 2015–2018 to record income tax expense (benefit) and income taxes payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that one-half of the benefits of the loss carryforward will not be realized.
Prepare the income tax section of the 2017 income statement beginning with the line “Operating loss before income taxes.”
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