Exam 16: Accounting for Income Taxes

Under the accrual method,what is the effect of the tax rate change in F2014? F2013 F2014 F2015 Deferred tax liability 30,000 Revenue 130,000 150,000 Taxable income 95,000 105,000 Tax rate 30\% 35\% 35\%

Which statement is correct?

Which statement best describes the "deferral method"?

At the beginning of the current fiscal year,Withering Corporation had a deferred income tax liability balance of $20,000,which relates to depreciable assets.During the year,Withering reported the following information: • Income before income taxes for the year was $300,000 and the tax rate was 45%. • Depreciation expense was $150,000 and CCA was $130,000. • Unearned rent revenue was reported at $120,000.Rent revenue is taxable when the cash is received.There was no opening balance in the unearned rent revenue account at the beginning of the year. • No other items affected deferred tax amounts other than these transactions. Requirement: Prepare the journal entry or entries to record income taxes for the year.

Under the accrual method,what is the effect of the tax rate change in F2015? F2014 F2015 Deferred tax liability 27,500 Revenue 150,000 Taxable income 105,000 Tax rate 25\% 35\%