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mod 10 problems




Question;Problem 1;Brogan, Inc., reports bad debt expense using the allowance method. For tax;purposes the direct write-off method is used. At the end of the current year;Brogan has accounts receivable and an allowance for uncollectible accounts of;$4,000,000 and $300,000, respectively, and taxable income of $22,000,000. At;the end of the previous year, Pocus reported a deferred tax asset of $90,000;related to the difference in reporting bad debts, its only temporary;difference. The enacted tax rate is 35% each year.;Requirements;1 Prepare the appropriate journal entry for Brogan to record the income tax;provision for the current year. Show well-labeled supporting computations. Problem 2;At the end of the prior year, Tasha Inc. had a deferred tax asset of;$21,000,000 attributable to its only timing difference, a temporary difference;of $48,000,000 in a liability for estimated expenses. At that time a valuation;allowance of $3,000,000 was established. At the end of the current year, the;temporary difference is $47,000,000, and Tasha determines that the balance in;the valuation account should now be $4,000,000. Taxable income is $18,000,000;and the tax rate is 35% for all years.;Requirements;2. Prepare journal entries to record Tasha?s income tax expense for the current;year. Show well-labeled supporting computations for the income tax payable, the;valuation allowance, and the change in the deferred tax asset account. ="msonormal">


Paper#38638 | Written in 18-Jul-2015

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