Kelly Company has pretax accounting income of $100,000 for 2024. The following items were considered differences between pretax accounting and taxable income: 1. Interest on municipal bonds $9,000 2. Excess tax depreciation $4,000 3. Life insurance premiums on officers $5,000 4. Warranty expense $10,000; $8,000 in warranties actually paid. The company is subject to a 30% tax rate. What is Kelly Company's effective tax rate in 2024? O A. 26.7% OB. 31.5% OC. 28.8% O D. 30.0%
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- In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and taxable income for 2020. The prior period adjustment was the result of an error in calculating bad debt expense for 2019. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. When the company applies intraperiod income tax allocation, the prior period adjustment will be shown on the: a. income statement at 12,000 b. income statement at 8,400 (net of 3,600 income taxes) c. retained earnings statement at 12,000 d. retained earnings statement at 8,400 (net of 3,600 income taxes)Carla Vista Corporation reports pretax financial income of $265,900 for 2025. The following items cause taxable income to be different than pretax financial income: 1. Rental income on the income statement is less than rent collected on the tax return by $64,100. Depreciation on the tax return is greater than depreciation on the income statement by $41.200. Interest on an investment in a municipal bond of $8,000 on the income statement. 2. 3. Carla Vista' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. (a) Your Answer Correct Answer (Used) Compute taxable income and income taxes payable for 25. Taxable income Income taxes payable 280,800 84,240 Q
- Sheridan Corporation reports pretax financial income of $263,500 for 2025. The following items cause taxable income to be different than pretax financial income: 1. Rental income on the income statement is less than rent collected on the tax return by $61,900. 2. Depreciation on the tax return is greater than depreciation on the income statement by $43,600. 3. Interest on an investment in a municipal bond of $6,500 on the income statement. Sheridan' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2025. (a) Your answer is correct. Compute taxable income and income taxes payable for 2025. (b) Taxable income $ 275300 Income taxes payable $ 82590 eTextbook and Medla List of Accounts Your answer is correct. Attempts: 1 of 3 used Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025.(Credit account titles are automatically indented…Martinez Corporation reports pretax financial income of $264,100 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Rental income on the income statement is less than rent collected on the tax return by $65,200. Depreciation on the tax return is greater than depreciation on the income statement by $41,800. Interest on an investment in a municipal bond of $7,000 on the income statement. 3. Martinez' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Compute taxable income and income taxes payable for 2020. Taxable income $enter a dollar amount Income taxes payable $enter a dollar amount 2.J-Matt, Inc., had pretax accounting income of $329,000 and taxable income of $372,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $43,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022-2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt's income taxes for 2021 and prepare the appropriate journal entry.
- Ehrlich Company had the following information for 2021. 1. Pretax financial income for 2021 is $100,000. 2. The tax rate enacted for 2021 and future years is 20%. 3. Differences between the 2021 income statement and tax return are listed below: a. Warranty expense accrued for financial reporting purposes amounts to $7,000. Warranty deductions per the tax return amount to $2,000. b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $67,000. c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. d. A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. e. Interest revenue recognized on an investment in tax-exempt municipal bonds amounts to $1,500. Instructions: a. Compute…Wise Company began operations at the beginning of 2021. The following information pertains to this company. 1. Pretax financial income for 2021 is $100,000. 2. The tax rate enacted for 2021 and future years is 20%. 3. Differences between the 2021 income statement and tax return are listed below: a. Warranty expense accrued for financial reporting purposes amounts to $7,000. Warranty deductions per the tax return amount to $2,000. b. Gross profit on construction contracts using the percentage-of-completion method per books amounts to $92,000. Gross profit on construction contracts for tax purposes amounts to $67,000. c. Depreciation of property, plant, and equipment for financial reporting purposes amounts to $60,000. Depreciation of these assets amounts to $80,000 for the tax return. d. A $3,500 fine paid for violation of pollution laws was deducted in computing pretax financial income. e. Interest revenue recognized on an investment in tax-exempt municipal…Required: 1. Determine the amounts necessary to record Allmond's income taxes for 20: Allmond Corporation, organized on January 3, 2021, had pretax accounting income of $25 million and taxable income of $33 million 2. What is Allmond's 2021 net income? for the year ended December 31, 2021. The 2021 tax rate is 25%. The only difference between accounting income and taxable income is estimated product warranty costs. Assume that expected payments and scheduled tax rates (based on recently enacted tax legislation) are as follows: Complete this question by entering your answers in the tabs below. Required 1 Calculation Required 1 GJ Required 2 Prepare the appropriate journal entry. (If no entry is required for a transaction/e account field. Enter your answers in millions rounded to 2 decimal places (i.e., 5 View transaction list 1 Record 2021 income taxes. X Cr 2022 2023 2024 2025 $2 million 2 million 1 million 3 million 35% 35% 35% 25% Required: 1. Determine the amounts necessary to…
- Harper Company began operations at the beginning of 2021. The following information pertains to this company. 1. Pretax financial income:2021 $ 850,0002022 1,250,0002023 2,875,0002. The tax rate enacted for 2021 is 20%.3. Differences between the 2021 income statement and tax return are listed below: (a) Interest revenue earned on an investment in tax-exempt municipal bonds amounts to $3,000 in 2021, $1,500 in 2022, and $2,000 in 2023.(b) Revenue in 2023 on a construction contract is $800,000 for tax purposes. For financial statement purposes, revenue will amount to $100,000 in 2021, $300,000 in 2022, and the remainder in 2023. This is Harper’s only construction contract during 2021-2023.(c) Depreciation of equipment for financial reporting purposes is calculated using the straight-line method. Harper purchased equipment on January 1, 2022 at a cost of $50,000. The equipment has a life of 5 years and a $5,000 salvage value. Depreciation of the equipment for the tax return will be based…Carla Corporation reports pretax financial income of $262,600 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Rental income on the income statement is less than rent collected on the tax return by $62,300. 2. Depreciation on the tax return is greater than depreciation on the income statement by $43,200. Interest on an investment in a municipal bond of $5,900 on the income statement. 3. Carla' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Your answer has been saved. See score details after the due date. Compute taxable income and income taxes payable for 2020. Taxable income %24 275,800 Income taxes payable 24 82,740Carla Corporation reports pretax financial income of $262,600 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Rental income on the income statement is less than rent collected on the tax return by $62,300. 2. Depreciation on the tax return is greater than depreciation on the income statement by $43,200. 3. Interest on an investment in a municipal bond of $5,900 on the income statement. Carla' tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Compute taxable income and income taxes payable for 2020. Taxable income $ Income taxes payable 2$