Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 17, Problem 17.10P
a.
To determine
To prepare:
b.
To determine
To prepare: Roll forward reconciliation for company K.
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Under IFRS:
a. “probable” is defined as a level of likelihood of at least slightly more than 60%.
b. a company should reduce a deferred tax asset when it is likely that some or all of it will not be realized by using a valuation allowance.
c. a company considers only positive evidence when determining whether to recognize a deferred tax asset.
d. deferred tax assets must be evaluated at the end of each accounting period.
Ivanhoe Corporation has a deferred tax asset at December 31, 2026 of $210000 due to the
recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are
as follows: 30% for 2023-2025; 25% for 2026; and 20% for 2027 and thereafter. Assuming that
management expects that only 50% of the related benefits will be realized, a valuation account
should be established in the amount of
O $36750.
O $31500.
O $105000.
O $42000.
of
For the events described below, select the taxrelated term from the following list that best applies: gross income, depreciation, operating expense, taxable income, income tax, or net operating profit after taxes. (a) A corporation reports that it had a negative $1,750,000 net profit on its annual income statement. (b) An asset with a current book value of $120,000 was utilized on a new processing line to increase sales by $200,000 this year. (c) A machine has an annual write-off of $21,000. (d ) The cost to maintain quality assurance equipment during the past year was $75,000. (e) A supermarket collected $24,000 in lottery ticket sales last year. Based on the winnings paid to individuals holding these tickets, a rebate of $250 was sent to the store manager. ( f ) An asset with a book value of $8000 was retired and sold for $8450. (g) The cost of goods sold in the past year was $3,680,200. (h) An over-the-counter software system will generate $420,000 in revenue this quarter
Chapter 17 Solutions
Intermediate Accounting
Ch. 17 - Prob. 17.1QCh. 17 - When will income tax expense and income taxes...Ch. 17 - Will permanent differences cause the effective tax...Ch. 17 - When do permanent differences arise?Ch. 17 - How are deferred tax assets and deferred tax...Ch. 17 - Prob. 17.6QCh. 17 - Prob. 17.7QCh. 17 - Prob. 17.8QCh. 17 - Prob. 17.9QCh. 17 - How does a firm determine the need for a valuation...
Ch. 17 - Prob. 17.11QCh. 17 - Prob. 17.12QCh. 17 - Prob. 17.13QCh. 17 - How does an entity account for uncertain tax...Ch. 17 - Prob. 17.15QCh. 17 - Prob. 17.16QCh. 17 - Do U.S. GAAP and IFRS classify deferred tax...Ch. 17 - Prob. 17.18QCh. 17 - Cavan Company prepared the following...Ch. 17 - Prob. 17.2MCCh. 17 - Prob. 17.3MCCh. 17 - Prob. 17.4MCCh. 17 - Prob. 17.5MCCh. 17 - Prob. 17.6MCCh. 17 - Prob. 17.7MCCh. 17 - Prob. 17.1BECh. 17 - Income Taxes Payable. Limmox Company has...Ch. 17 - Permanent Differences. Simmox Company's income...Ch. 17 - Permanent Differences. Plimmox Company's income...Ch. 17 - Permanent Differences, Reconciliation of Statutory...Ch. 17 - Prob. 17.6BECh. 17 - Prob. 17.7BECh. 17 - Prob. 17.8BECh. 17 - Prob. 17.9BECh. 17 - Prob. 17.10BECh. 17 - Temporary Differences, Deferred Tax Liability....Ch. 17 - Temporary Differences. Deferred Tax Asset....Ch. 17 - Temporary Differences, Deferred Tax Asset. Using...Ch. 17 - Prob. 17.14BECh. 17 - Realizability of Deferred Assets. Maves, Inc....Ch. 17 - Prob. 17.16BECh. 17 - Prob. 17.17BECh. 17 - Prob. 17.18BECh. 17 - Prob. 17.19BECh. 17 - Prob. 17.20BECh. 17 - Prob. 17.21BECh. 17 - Prob. 17.22BECh. 17 - Prob. 17.23BECh. 17 - Prob. 17.24BECh. 17 - Prob. 17.25BECh. 17 - Prob. 17.26BECh. 17 - Prob. 17.27BECh. 17 - Prob. 17.1ECh. 17 - Prob. 17.2ECh. 17 - Prob. 17.3ECh. 17 - Prob. 17.4ECh. 17 - Temporary Differences, Deferred Tax Assets and...Ch. 17 - Temporary Differences, Deferred Tax Assets and...Ch. 17 - Prob. 17.7ECh. 17 - Prob. 17.8ECh. 17 - Change in Tax Rates, Permanent Difference,...Ch. 17 - Prob. 17.10ECh. 17 - Prob. 17.11ECh. 17 - Net Operating Loss, Carryback. Phlash Photo Labs,...Ch. 17 - Net Operating Loss, Carryforward. Loggins Lumber...Ch. 17 - Prob. 17.14ECh. 17 - Prob. 17.15ECh. 17 - Net Operating Loss, Carryforward, Tax Rate Change....Ch. 17 - Prob. 17.17ECh. 17 - Prob. 17.18ECh. 17 - Uncertain Tax Positions. Lewis Eagle Corporation...Ch. 17 - Uncertain Tax Positions. Based on the information...Ch. 17 - Prob. 17.21ECh. 17 - Prob. 17.1PCh. 17 - Temporary Differences, Deferred Tax Liabilities,...Ch. 17 - Prob. 17.3PCh. 17 - Prob. 17.4PCh. 17 - Temporary Differences, Deferred Tax Liabilities,...Ch. 17 - Prob. 17.6PCh. 17 - Prob. 17.7PCh. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.10PCh. 17 - Prob. 17.11PCh. 17 - Prob. 17.12PCh. 17 - Permanent Differences, Temporary Tax Differences,...Ch. 17 - Prob. 1JCCh. 17 - Prob. 2JCCh. 17 - Prob. 1FSACCh. 17 - Prob. 1SSCCh. 17 - Prob. 2SSCCh. 17 - Prob. 3SSCCh. 17 - Scene 1: The concept of the deferred tax liability...Ch. 17 - Basis for Conclusions Case 2: Uncertain Tax...
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- 1. Pine Corp.'s books showed pretax income of P800,000 for the PROBLEM 6: MULTIPLE CHOICE - COMPUTATIONAL 1. Pine Corp.'s books showed pretax income of P800,000 for the year ended December 31, 20x1. In the computation of federal income taxes, the, following data were considered: Gain on an involuntary conversion (expropriation) Depreciation deducted for tax purposes in excess of depreciation deducted for book Estimated tax payments during 20x1 Le in 350,000 in purposes 50,000 70,000 Income tax rate 30% What amount should Pine report as its current income tax liability on its December 31, 20x1, balance sheet? a. 50,000 b. 65,000 с. 120,000 d. 135,000 (AICPA)arrow_forwardOn December 31, 2021, Winston Inc. has determined that it is more likely than not that $258000 of a $611000 deferred tax asset will not be realized. The journal entry to record this reduction in asset value will include a O debit to Income Tax Payable of $258000. O credit to the Allowance to Reduce Deferred Tax Asset to Expected Realizable Value of $258000. O credit to Income Tax Expense for $353000. Odebit to Income Tax Expense for $353000arrow_forwardDefinitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxesarrow_forward
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