P14-9 Calculating and recording a company's income tax The accounting records of Rhyme Timber Ltd provide income statement data for 2016: Total revenue Total expenses Profit before income tax $940 000 (750 000) Requirements 1 Calculate taxable income for the year. $190000 Total expenses include depreciation of $50000 calculated under the straight-line method. In calculating taxable income on the tax return, Rhyme Timber uses the reducing-balance (RB) method. RB depreciation was $80000 for 2016. The company income tax rate is 30%. 2 Prepare the journal entry in respect of income tax for 2016. 3 Show how to report income tax liabilities on Rhyme's balance sheet.
P14-9 Calculating and recording a company's income tax The accounting records of Rhyme Timber Ltd provide income statement data for 2016: Total revenue Total expenses Profit before income tax $940 000 (750 000) Requirements 1 Calculate taxable income for the year. $190000 Total expenses include depreciation of $50000 calculated under the straight-line method. In calculating taxable income on the tax return, Rhyme Timber uses the reducing-balance (RB) method. RB depreciation was $80000 for 2016. The company income tax rate is 30%. 2 Prepare the journal entry in respect of income tax for 2016. 3 Show how to report income tax liabilities on Rhyme's balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![P14-9 Calculating and recording
a company's income tax
The accounting records of Rhyme Timber Ltd provide income statement data for 2016:
Total revenue
Total expenses
Profit before income tax
$940000
Requirements
1 Calculate taxable income for the year.
(750 000)
$190000
Total expenses include depreciation of $50000 calculated under the
straight-line method. In calculating taxable income on the tax return, Rhyme
Timber uses the reducing-balance (RB) method. RB depreciation was
$80000 for 2016. The company income tax rate is 30%.
2 Prepare the journal entry in respect of income tax for 2016.
3 Show how to report income tax liabilities on Rhyme's balance sheet.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4cebc6cc-769a-4bf1-9977-1c25293d7455%2Fe1fc36de-fc03-470f-a93b-be5665dc0973%2Fvnsvpzc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:P14-9 Calculating and recording
a company's income tax
The accounting records of Rhyme Timber Ltd provide income statement data for 2016:
Total revenue
Total expenses
Profit before income tax
$940000
Requirements
1 Calculate taxable income for the year.
(750 000)
$190000
Total expenses include depreciation of $50000 calculated under the
straight-line method. In calculating taxable income on the tax return, Rhyme
Timber uses the reducing-balance (RB) method. RB depreciation was
$80000 for 2016. The company income tax rate is 30%.
2 Prepare the journal entry in respect of income tax for 2016.
3 Show how to report income tax liabilities on Rhyme's balance sheet.
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