At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $95 million attributable to a temporary book- tax difference of $380 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $288 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $684 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.

At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $95 million attributable to a temporary book- tax difference of $380 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $288 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $684 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 20CE

See similar textbooks

Similar questions

Prior to and during 2019, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of 24,500 for financial reporting purposes and of 20,000 for tax purposes at the end of 2019. In addition, Shadrach recognized a 3,500 estimated liability for legal expenses in the financial statements during 2019; it expects to pay this liability (and deduct it for tax purposes) in 2023. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net deferred tax liability at the end of 2019? a. 300 b. 450 c. 1,050 d. 1,350
Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above
At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $110 million attributable to a temporary book- tax difference of $440 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $336 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $792 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to record Payne's income taxes for 2024, assuming it is more likely than not that the deferred…
At the end of 2023, Payne Industries had a deferred tax asset account with a balance of $115 million attributable to a temporary book-tax difference of $460 million in a liability for estimated expenses. At the end of 2024, the temporary difference is $352 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2024 is $828 million and the tax rate is 25%. 1)Prepare the journal entry(s) to record Payne’s income taxes for 2024, assuming it is more likely than not that the deferred tax asset will be realized in full. 2)Prepare the journal entry(s) to record Payne’s income taxes for 2024, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $40 million attributable to a temporary book-tax difference of $160 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $112 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $288 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax…
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $65 million attributable to a temporary book-tax difference of $260 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $192 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $468 million and the tax rate is 25%. Required:1. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full.2. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $65 million attributable to a temporary book-tax difference of $260 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $192 million. Payne has no other temporary differences. Taxable income for 2021 is $468 million and the tax rate is 25%. Payne has a valuation allowance of $26 million for the deferred tax asset at the beginning of 2021. Required:1. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full.2. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $90 million attributable to a temporary book-tax difference of $360 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $272 million. Payne has no other temporary differences. Taxable income for 2021 is $648 million and the tax rate is 25%. Payne has a valuation allowance of $36 million for the deferred tax asset at the beginning of 2021. Required: Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $100 million attributable to a temporary book- tax difference of $400 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $304 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $720 million and the tax rate is 25%. Required: 1. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the journal entry(s) to record Payne's income taxes for 2021, assuming it is more likely than not that the deferred…
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $100 million attributable to a temporary book-tax difference of $400 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $304 million. Payne has no other temporary differences and no valuation allowance for the deferred tax asset. Taxable income for 2021 is $720 million and the tax rate is 25%. Required:1. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. ( 1 Journal Entry for - 2021 income taxes. 1 Journal Entry for valuation allowance for the end of 2021.) 2. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized. ( 1 Journal Entry for - 2021 income taxes. 1 Journal Entry for valuation allowance for the end of 2021.)
At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $80 million attributable to a temporary book-tax difference of $320 million in a liability for estimated expenses. At the end of 2021, the temporary difference is $240 million. Payne has no other temporary differences. Taxable income for 2021 is $576 million and the tax rate is 25%. Payne has a valuation allowance of $32 million for the deferred tax asset at the beginning of 2021. Required: 1. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that the deferred tax asset will be realized in full. 2. Prepare the journal entry(s) to record Payne’s income taxes for 2021, assuming it is more likely than not that only one-fourth of the deferred tax asset ultimately will be realized.At the end of 2020, Payne Industries had a deferred tax asset account with a balance of $80 million attributable to a temporary book-tax difference of $320 million in a…