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E19-18B (Three Differences, Multiple Rates, Future Taxable Income)During 2014, Cumpuinc?s first year of operations, the company reports pretax financial income at $231,000. Cumpuinc?s enacted tax rate is 40% for 2014 and 2015 and 30% for all later years.

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E19-18B (Three Differences, Multiple Rates, Future Taxable Income)During 2014, Cumpuinc?s first year of operations, the company reports pretax financial income at $231,000. Cumpuinc?s enacted tax rate is 40% for 2014 and 2015 and 30% for all later years. Cumpuinc expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2014, are summarized below.;Future Years;2015 2016 2017 2018 2019 Total;Future taxable (deductible);amounts;Warranty costs $(20,000) $(60,00 $(25,000) $(105,000);Depreciation (20,000) 12,000 12,000 $12,000 $12,000 28,000;Installment sales 60,000 75,000 135,000;Instructions;(a) Complete the schedule below to compute deferred taxes at December 31, 2014.;Future Taxable;December 31, 2014;(Deductible) Tax Deferred Tax;Temporary Difference Amounts Rate (Asset) Liability;Warranty costs $(105,000);Depreciation 28,000;Installment sales 135,000;Totals $;(b) Compute taxable income for 2014.;(c) Prepare the journal entry to record income tax payable, deferred taxes, and income tax expense for 2014.

 

Paper#75300 | Written in 18-Jul-2015

Price : $27
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