Exam 16: Income Taxes

The data shown below represent the complete taxable income history for Confederacy Corporation.The tax rate was 35% throughout the entire period 2008 through 2015: If the company always chooses the carryback,carryforward option,what is the tax liability for 2014?

Concourse Corporation paid $20,000 in January of 2014 for premiums on a two- year life insurance policy which names the company as the beneficiary.Additionally,Concourse Corporation's financial statements for the year ended December 31,2014,revealed the company paid $105,000 in taxes during the year and also accrued estimated litigation losses of $200,000.Assuming the lawsuit was resolved in February of 2015 (at which time a $200,000 loss was recognized for tax purposes)and that Concourse's tax rate is 30 percent for both 2014 and 2015,what amount should Concourse report as asset for net deferred income taxes on its 2014 balance sheet?

On December 31,2013,Breezeway,Inc. ,reported a current deferred tax liability of $140,000 and a noncurrent deferred tax asset of $40,000.At the end of 2014,Breezeway reported a current deferred tax liability of $100,000,and a noncurrent deferred tax liability of $44,000.The deferred tax expense for 2014 is

Which of the following does NOT help explain why income tax expense is different from the product of pretax income times the current tax rate?

During a year,Awesome Company reported income tax expense of $300,000.The amount of taxes currently payable remained unchanged from the beginning to the end of the year.The deferred tax liability classified as noncurrent that resulted from the use of MACRS for tax purposes and straight-line depreciation for financial reporting purposes,increased from $40,000 at the beginning of the year to $44,000 at the end of the year.How much cash was paid for income taxes during for the year?

On the statement of cash flows using the indirect method,an increase in the deferred tax liability would be shown as

Recognizing tax benefits in a loss year due to a loss carryforward requires

Rodeo Corporation reported depreciation of $450,000 on its 2014 tax return.However,in its 2014 income statement,Rodeo reported depreciation of $300,000,as well as $30,000 interest revenue on tax-free bonds.The difference in depreciation is only a temporary difference,and it will reverse equally over the next three years.Rodeo's enacted income tax rates are as follows: What amount should be included in the deferred income tax liability in Rodeo's December 31,2014,balance sheet?

Ballantine Products,Inc. ,reported an excess of warranty expense over warranty deductions of $72,000 for the year ended December 31,2014.This temporary difference will reverse in equal amounts over the years 2015 to 2017.The enacted tax rates are as follows: The reporting for this temporary difference at December 31,2014,would be a

An item that would create a permanent difference in pretax financial and taxable incomes would be

The following differences between financial and taxable income were reported by Angostura Corporation for the current year: Assume that Angostura Corporation had pretax accounting income [before considering items (a)through (h)] of $900,000 for the current year.Compute the taxable income for the current year.

The following information was taken from Caribbean Corporation's 2014 income statement: Caribbeans' first year of operations was 2014.The company has a 30 percent tax rate.Management decided to use accelerated depreciation for tax purpose and the straight-line method of depreciation for financial reporting purposes.The amount charged to depreciation expense in 2014 was $600,000.Assuming no other differences existed between book income and taxable income,what amount did Caribbean deduct for depreciation on its tax return for 2014?

Alpha had taxable income of $1,500 during 2014.Alpha used accelerated depreciation for tax purposes ($2,000)and straight-line depreciation for financial reporting purposes ($800).On December 30,2014,Alpha collected the January 2015 rent of $600 on a lot it rents on a month-by-month basis to Zenith.Alpha's pretax accounting income for 2014 would be

A deferred tax liability arising from the use of an accelerated method of depreciation for tax purposes and the straight-line method for financial reporting purposes would be classified on the balance sheet as

The books of the Speedster Company for the year ended December 31,2014,showed pretax income of $295,000.In computing the taxable income for federal income tax purposes,the following timing differences were taken into account: What should Speedster record as its current federal income tax liability at December 31,2014,assuming a corporate income tax rate of 30 percent?

When enacted tax rates change,the asset and liability method of interperiod tax allocation recognizes the rate change as

Creative Corporation's income statement for the year ended December 31,2014,shows pretax income of $300,000.The following items are treated differently on the tax return and in the accounting records: Assume that Creative's tax rate for 2014 is 40 percent.What is the current portion of Creative's total income tax expense for 2014?

Intraperiod tax allocation

The purpose of an interperiod income tax allocation is to

The result of interperiod income tax allocation is that