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E19-12B (Two Temporary Differences, One Rate, Beginning Deferred Taxes, Compute Pretax Financial Income) The following facts relate to Integrated Products Corporation. 1. Deferred tax liability, January 1, 2014, $225,000. 2. Deferred tax asset, January 1,

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E19-12B (Two Temporary Differences, One Rate, Beginning Deferred Taxes, Compute Pretax Financial Income) The following facts relate to Integrated Products Corporation.;1. Deferred tax liability, January 1, 2014, $225,000.;2. Deferred tax asset, January 1, 2014, $162,000.;3. Taxable income for 2014, $386,000.;4. Cumulative temporary difference at December 31, 2014, giving rise to future taxable amounts, $838,000.;5. Cumulative temporary difference at December 31, 2014, giving rise to future deductible amounts, $965,000.;6. Tax rate for all years, 30%. No permanent differences exist.;7. The company is expected to operate profitably in the future.;Instructions;(a) Compute the amount of pretax financial income for 2014.;(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014.;(c) Prepare the income tax expense section of the income statement for 2014, beginning with the line;?Income before income taxes.?;(d) Compute the effective tax rate for 2014.

 

Paper#75314 | Written in 18-Jul-2015

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