Advanced Financial Accounting
12th Edition
ISBN: 9781259916977
Author: Christensen, Theodore E., COTTRELL, David M., Budd, Cassy
Publisher: Mcgraw-hill Education,
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Chapter 13, Problem 13.6.1E
Mutinied−Choice Questions on Income Taxes at Interim Dates [AICPA Adapted]
Select the coned answer for each of the following questions.
- According to ASC 270 and 740, income tax expense in an income statement for the first interim period of an enterprises fiscal year should be computed by applying the a. Estimated income tax rate for the full fiscal year to the pretax accounting income for theinterim period.
b. Estimated income tax rate for the fullfiscal year to thetaxable income for the interim period.
c. Statutory income tax rate to the pretax accounting income for the interim period.
d. Statutory income tax rate to the taxable income for the interim period.
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1. For interim financial reporting, a company's income tax provision for the second quarter of 2022 should be determined using
a. Effective tax rate expected to be applicable for the full year of 2022 as estimated at the end of the first quarter of 2022
b. Effective tax rate expected to be applicable for the full year of 2022 as estimated at the end of the second quarter of 2022.
c. Effective tax rate expected to the applicable for the second quarter of 2022
d. Statutory tax rate for 2022
a. Prepare a schedule showing the reversal of the temporary differences and the computation of income taxes payable and deferred tax asset or liability as of December 31, 2020.b. Prepare journal entries to record income taxes payable and deferred income taxes.c. Prepare the section of the statement of comprehensive income of Wall Services beginning with "Income from continuing operations before income taxes" for the year ended December 31, 2020.
Required:
1. Prepare the journal entry to recognize the income tax benefit of the net operating loss in 2021. Assume Fore will carry back its NOL
to prior years.
2. What is the net operating loss reported in 2021 income statement?
3. Prepare the journal entry to record income taxes in 2022 assuming pretax accounting income is $288 million. No additional
temporary differences originate in 2022.
Chapter 13 Solutions
Advanced Financial Accounting
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