Exam 16: Corporate Income Tax

The following information is available for Ryan Corporation: Assets at cost-$260,000; Accumulated depreciation-$80,000; Accumulated CCA-$90,000; meals and entertainment recorded in the books-$12,000; golf dues paid-$5,000.Based on this information and a tax rate of 45%, what is the amount of the temporary difference?

Amanda Corporation incurred $10,000 of meals and entertainment expenses for the year ended December 31.The amount that is deductible for tax purposes is:

EGR just completed its first year end.During the year, EGR recorded $12,000 in depreciation ($18,500 CCA).In addition there was a deduction in the accounting records for meals and entertainment amounting to $6,000.As a result taxable income will:

Which of the following could never be subject to inter-period tax allocation?

Deferred taxes appear on a company's balance sheet as a result of inter-period tax allocation.

The following information is available for Ryan Corporation: Assets at cost-$260,000 (8 year life, straight-line depreciation, no salvage value, purchased 2 years ago); Accumulated depreciation-$65,000.Accumulated CCA-$105,300; CCA rate-30%; meals and entertainment recorded in the books-$12,000; golf dues paid and expensed on the books-$5,000; pre-tax accounting income-$40,000.No CCA was taken during the current year.Based on this information and a constant tax rate of 45%, which of the following would appear on the statement of financial position as a result of the information given above?

JMR Corp.had one temporary difference during the year.The carrying value of its capital assets for accounting purposes amounted to $350,000; the carrying value for CCA purposes was $380,000.What is the temporary difference amount, what would it be called and where should it be presented on the balance sheet?

A firm reported the following in its income statement for the current year: depreciation expense, $4,000; pollution violation fine, $12,000; pre-tax accounting income, $10,000.The tax rate is 40% for the current year, and no changes to this rate are foreseen in the near term.For tax purposes, the CCA deduction was $9,000.What amount of deferred income tax (benefit)expense will be recognized for this year? Assume a beginning Deferred Tax asset balance of $4,000.

Income tax expense generally equals the product of the current period income tax rate and pre-tax accounting income.

MNO's taxable income was $900 during 2013.MNO had product warranty costs of $360 recognizable for tax purposes and $400 recognizable for financial accounting purposes.MNO had no other temporary differences.MNO's pre-tax accounting income for 2013 would be:

Under the liability approach, deferred taxes on the balance sheet are valued at the tax rate in that will be in effect when the temporary differences reverse.

The following information is available to you: Income before tax $1,230,000, depreciation, $350,000; CCA, $300,000; tax rate, 40%.Prepare the journal entry to record taxes for the year.(Assume there are no previous tax differences.)

Income tax expense for continuing operations and discontinued operations must be disclosed separately on the income statement.

The following data of ABC Ltd.relates to the current year: Compute taxable income for the year.

Company A had depreciation of $14,000 and CCA of $12,500 during its first year of operations.The tax rates for Years 1 and 2 were 25% and 20% respectively.The Year 2 tax rate was enacted in Year 2.At the end of year 1, this will result in:

"Taxable amounts" include expenses and losses that are included in the tax return BEFORE they are recognized for accounting purposes.

Temporary differences occur only because accounting standards and income tax laws differ as to when they recognize assets, liabilities, owners' equity, revenues, gains, expenses, and losses.

All temporary differences are related to differences in the timing of accounting recognition compared with income tax recognition.

EGR Corporation has one asset worth $650,000.Accumulated Depreciation to date is $230,000 and accumulated CCA is $200,000.The Corporation also recorded warranty expense of $35,000.To date no customers have required warranty service, so no warranty expenditures have been made.Assuming the tax rate is constant at 40%, this will result in a:

The Harry Company reported for pre-tax income of $500,000 for Year 2.Its pre-tax income included $40,000 of meals and entertainment expenses and CCA in excess of depreciation of $70,000.Harry's tax rate for Year 2 was 20%.The tax rate in effect for Year 3 and beyond was 25%.The Year 3 tax rate was enacted during Year 2.At the start of Year 2, Harry's capital assets had a book value of $100,000 and a UCC of $200,000. Based on the information provided above, Harry's total reported income tax expense for Year 2 would have been: