For all years (2003-2005) Seminole Corp has preliminary pretax book income of $80,000. Included in the $80,000 each year is $10,000 of municipal bond income that is not taxable under IRS rules. Not included in the $80,000 is $60,000 of gain from an investment sold in 2003. The buyer of the investment will pay Seminole the $60,000 over 3 years ($20,000 in 2003, 2004, 2005). For financial reporting purposes, all of the gain should be on the P&L in the period the investment was sold. For tax purposes, the company qualifies for the installment sales method meaning that the gain will be taxed as the cash is received. The tax rate was 35% in 2003, and 30% in 2004 and 2005. The 30% rate was not enacted in law until the first day of 2004. There are no DTA/DTL balances prior to 2003. The installment receivable is shown on the balance sheet as part current, part long term.;Required;1. All journal entries to record the income taxes on the books of Seminole for each year.;2. Show how deferred income taxes will appear on the B/S of Seminole at the end of each year. Just give me the caption (DTA and/or DTL), the amount and whether it should be long term or current.;3. Show a quick P&L of the income tax expense section of the P&L for each year.
Paper#20886 | Written in 18-Jul-2015Price : $27