On January 1, 2022, Gore, Inc. purchased a machine for €720,000 which will be depreciated €72,000 per year for financial statement reporting purposes. For income tax reporting, Gore elected to expense €80,000 and to use straight-line depreciation which will allow a depreciation deduction of €64,000 for 2022. Assume a present and future enacted income tax rate of 30%. What amount should be added to Gore's deferred tax liability for this temporary difference at December 31, 2022?
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On January 1, 2022, Gore, Inc. purchased a machine for €720,000 which will be
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- Use this information for parts A and B. In 2026, Goodfellas Company reported pretax GAAP income of $400,000. During 2026, Goodfellas had the following differences between GAAP and tax: Recognized $100,000 installment sale revenue under GAAP in 2026. This revenue will be recognized for tax purposes in equal amounts over the next four years. Recognized $50,000 of depreciation in 2026 for tax. Starting in 2027, GAAP depreciation is $10,000 per year for the next five years. Received $100,000 in unearned rent revenue in 2026. Rent will be earned in equal amounts in 2027 and 2028. The tax rate for 2026 is 30 percent and 20 percent thereafter. A) What journal entry does Goodfellas record for taxes in 2026?On January 1, 2021, Sheridan, Inc. purchased a machine for $2180000 which will be depreciated $218000 per year for financial statement reporting purposes. For income tax reporting, Sheridan elected to expense $243000 and to use straight-line depreciation which will allow a cost recovery deduction of $193000 for 2021. Assume a present and future enacted income tax rate of 20%. What amount should be added to Sheridan's deferred income tax liability for this temporary difference at December 31, 2021?Munoz Corp.'s books showed pretax financial income of €1,500,000 for the year ended December 31, 2022. In the computation of income taxes, the following data were considered (tax rate 30%) Gain on an involuntary conversion(Munoz has elected to replace the property within the statutory period using total proceeds.) 650,000 Depreciation deducted for tax purposes in excess of depreciation deducted for book purposes 100,000 Estimated tax payments, 2022 125,000 What amount should Munoz report as its current income tax liability on its December 31, 2022 statement of financial position?
- Tamarisk Inc. had pretax financial income of $139,400 in 2025. Included in the computation of that amount is insurance expense of $4,400 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000. Prepare Tamarisk's journal entry to record 2025 taxes, assuming a tax rate of 30%. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit CreditSINCO Ltd. purchased a piece of equipment in the year 2018 for the sum of $ 200,000. The company is subject to a tax depreciation rate of 25%. According to the following table, what is the depreciation allowance that this company can claim in 2020? (in the following picture : Année is year)Oriole, Inc. had pre-tax accounting income of $3000000 and a tax rate of 20% in 2025, its first year of operations. In 2025, the company had the following transactions: Received rent from Sandra, Co. for 2026 $99000 Municipal bond income 123000 Depreciation for tax purposes in excess of book depreciation 63000 Installment sales profit to be taxed in 2026 165000 What is the amount of income taxes payable for Oriole for 2025? O $549600 $640800 $510000 O $574200
- At the beginning of 2025, Whispering Construction Company changed from the cost-recovery method to recognizing revenue over time (percentage-of-completion) for financial reporting purposes. The company will continue to use the cost-recovery method for tax purposes. For years prior to 2025, pretax income under the two methods was as follows: percentage-of-completion $101,000, and cost-recovery $62,620. The tax rate is 20%. Prepare Whispering's 2025 journal entry to record the change in accounting principle. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Debit CreditCullumber, Inc. had pre-tax accounting income of $3900000 and a tax rate of 20% in 2021, its first year of operations. During 2021 the company had the following transactions: Received rent from Jane, Co. for 2022 $108000 Municipal bond income $132000 Depreciation for tax purposes in excess of book depreciation $72000 Installment sales profit to be taxed in 2022 $174000 For 2021, what is the amount of income taxes payable for Cullumber, Inc? $824400 $726000 $752400 $682800Ayres Services acquired an asset for $144 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis (no residual value). For tax purposes the asset/s cost is depreciated by MACRS. The enacted tax rate is 25%. Amounts for pretax accounting income, depreciation, and taxable income in 2021, 2022, 2023, and 2024 are as follows: _ ($ in millions) ____________ 2021 2022 2023 2024 Pretax accounting income $370 $390 $405 $440 Depreciation on the income statement 36 36 36 36 Depreciation on the tax return (57) (49) (23) (15) Taxable income…
- On January 1, 2021. Ameen Company purchased major pieces of manufacturing equipment for a total of $70 million. Ameen uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. At December 31, 2023, the book value of the equipment was $64 million and its tax basis was $54 million. At December 31, 2024, the book value of the equipment was $62 million and its tax basis was $47 million. There were no other temporary differences and no permanent differences. Pretax accounting income for 2024 was $35 million. Required: 1. Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. 2. What is Ameen's 2024 net income? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Ameen's 2024 income taxes. Assume an income tax rate of 25%. Note: If no entry is required for a transaction/event, select "No…Auburn Rentals acquired an asset for $160 million in 2021. The asset is depreciated for financial reporting purposes over four years on a straight-line basis with no residual value. For tax purposes the asset is depreciated using an accelerated method. The enacted tax rate is 30%. Annual amounts for pretax accounting income, depreciation, and taxable income are as follows: 2021 2022 2023 2024 Pretax accounting income $500 $550 $600 $650 Depreciation on the income statement 40 40 40 40 Depreciation on the tax return (50) (66) (30) _(14). Taxable income 450 484 570 636 On December 31, 2023, what amount of deferred tax liability would Auburn report? Multiple Choice S3.2 million $10.0 million $26.0 million $7.8 millionAt the beginning of 2018, FECC Corporation had discovered that the depreciation expense inthe years prior to 2018 was incorrectly calculated and recorded. For the years before 2018,total depreciation expense of $165,000 was recorded, whereas correct total depreciationexpense was $75,000. The tax rate is 30%. FECC follows IFRS and the deferred taxes method ofaccounting for income taxes.Required:1) Prepare FECC’s 2017 journal entry with respect to the depreciation expense that wasrecorded in the years prior to 2018.