NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future 175,000 785,900 572,150 80,650 348,250 275,875 Estimated doubtful accounts expense Estimated tax payments 197,745 500,500 Income tax rate Cash received for rent of which P486,280 will be recognized as income by the company on the next year 35% 589,125
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- Compute for the taxable income NINE Company reported a pre-tax financial income of P8,584,950 for the year ended December 31, 2021. The following items were also noted: Insurance premium on life of an officer with NINE Company as the beneficiary Tax depreciation Financial depreciation Penalties due to late filing of income tax returns Dividend received Estimated litigation loss accrued for financial accounting purposes deductible when settled in the future Estimated doubtful accounts expense Estimated tax payments Income tax rate Cash received for rent of which P486,280 will be recognized as income by the company on the next year 175,000 785,900 572,150 80,650 348,250 275,875 197,745 500,500 35% 589,125The reported pretax financial income of Mechado Company is P1,800,000 and current income tax rate is 30%. Assume the following differences between the financial income and taxable income for the year: 1. Fines paid for late payment of taxes, P15,5002. Premiums paid on life insurance policy on officers, P200,000. Beneficiary named in the policies is Mechado Company.3. Impairment loss recognized on goodwill, P90,0004. Excess of tax depreciation over book depreciation, P30,0005. Excess of warranty expense over actual expenditures, P27,0006. Excess of estimated uncollectible accounts for financial reporting over the accounts actually written off for tax reporting, P12,000.7. Rent collected in advance of period earned, P35,000. Taxable income is?The reported pretax financial income of Luciano Company is P1,800,000 and current income tax rate is 30%. Assume the following differences between the financial income and taxable income for the year:1. Fines paid for late payment of taxes, P15,5002. Premiums paid on life insurance policy on officers, P200,000. Beneficiary named in the policies is Luciano Company.3. Impairment loss recognized on goodwill, P90,0004. Excess of tax depreciation over book depreciation, P30,0005. Excess of warranty expense over actual expenditures, P27,0006. Excess of estimated uncollectible accounts for financial reporting over the accounts actually written off for tax reporting, P12,000.7. Rent collected in advance of period earned, P35,000. Question : Taxable income is?
- Howard Property and Casualty Insurance Corporation reported a net operating loss of $160,000 for financial reporting and tax purposes in 2019. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Howard's first two years of operation were as follows: 12017: 80,000 40% 2018: 20,000 25% Assume NOL is allowed to carry back for two years, the amount of net loss reported on the income statement for the year ended December 31, 2019 would be: (114,000) (96,000) (120,000) (108,000)CASE IV JKL Company provided the following information to its accountant to determine the tax due for the current year 2021 as well as any tax consequences of items that cause difference between financial and taxable income: Accounting income before tax, P15,600,000 Accounting Depreciation, P500,000 Litigation loss accrued during the year, P80,000, taxable only when paid. Tax depreciation, P1,500,000 Accrued liability on employees’ health care P250,000 Development cost of computer software, P3,000,000. The computer software is expected to be useful for 3 years starting this year. Nondeductible expenses, P1,250,000 Nontaxable revenue, P2,100,000 Revenue subject to 20% tax rate, P750,000 Bad debts expense for the period, P75,000 Bad debts written off during the year, P45,000 Gross income of installment sales of P450,000 (taxable when collected expected on 2022) The tax rate applicable for this year onwards is 30%. QUESTION: 1. Compute the taxable incomeCASE IV JKL Company provided the following information to its accountant to determine the tax due for the current year 2021 as well as any tax consequences of items that cause difference between financial and taxable income: Accounting income before tax, P15,600,000 Accounting Depreciation, P500,000 Litigation loss accrued during the year, P80,000, taxable only when paid. Tax depreciation, P1,500,000 Accrued liability on employees’ health care P250,000 Development cost of computer software, P3,000,000. The computer software is expected to be useful for 3 years starting this year. Nondeductible expenses, P1,250,000 Nontaxable revenue, P2,100,000 Revenue subject to 20% tax rate, P750,000 Bad debts expense for the period, P75,000 Bad debts written off during the year, P45,000 Gross income of installment sales of P450,000 (taxable when collected expected on 2022) The tax rate applicable for this year onwards is 30%. QUESTION: 7. Net income for the year is?
- A company's trial balance at 31 December 2021 shows a debit balance of GHS700,000 on current tax and a credit balance of GHS8,400,000 on deferred The directors have estimated the provision for income tax for the year at GHS4.5m and the required deferred tax provision is GHS5.6m, GHS1.2m of which relates to a property revaluation. What is the profit or loss income tax charge for the year ended 31 December 2021?E18-11 Multiple Tax Rates For the year ended December 31, 2019, Nelson Co.’s income statement showed income of $435,000 before income, tax expense. To compute taxable income, the following differences were noted: Income from tax-exempt municipal bonds $60,000 Depreciation deducted for tax purposes in excess of depreciation recorded on the books $120,000 Proceeds received from life insurance on death of an insured employee $100,00 Corporate tax rate for 2019 30% Enacted tax rate for future periods 35% Required: 1. Calculate taxable income and tax payable for tax purposes. 2. Prepare Nelson’s income tax journal entry at the end of 2019.x Company reports the following pretax income (loss) for both book and tax purposes. Year. Pretax income tax rate 2018 120,000 20% 2019 93,000 20% 2020. (82,000) 25% 2021 110,000 25% The tax rates listed were enacted by the beginning of 2018 Prepare the journal entries for years 2018-2021 to record income tax expense (benefit) and income taxes payable and the tax effects of the loss carryforward assuming that based on the weight of available evidence it is more likely than not that one half of the benefits of the loss carryforward will not be realized.
- Bestlook Company provided the following information for its first year of operatic December 31, 2019 in connection with the preparation of it income tax return: Accounting income Nondeductible expenses P8,000,000 400,000 600,000 Nontaxable revenue Deferred income on installment sales included in financial income but taxable in 2020 900,000 200,000 600,000 Doubtful accounts recorded Financial depreciation Tax depreciation Estimated warranty cost accrued in 2019 but not deductible for tax purposes until paid Income tax rate (current and future) a. How much is the current tax expense? 700,000 200,000 35% b. How much is the deferred tax asset? c. How much is the deferred tax liability? d. How much is the total tax expense?The accounting income (loss) figures for Flounder Corporation are as follows: 2018 $162,000 2019 246,000 2020 84,000 2021 (162,000) 2022 (385,000) 2023 140,000 2024 156,000 Accounting income (loss) and taxable income (loss) were the same for all years involved. Assume a 30% tax rate for 2018 and 2019, and a 25% tax rate for the remaining years. Prepare the journal entries for each of the years 2020 to 2024 to record income tax expense and the effects of the tax loss carrybacks and carryforwards, assuming Flounder uses the carryback provision first. All income and losses relate to normal operations and it is more likely than not that the company will generate substantial taxable income in the future. (List all debit entries before credit entries. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Year Account Titles and Explanation Debit…For the year ended December 31, 2019, Nelson Co.’s income statement showed income of $425,000 before income tax expense. To compute taxable income, the following differences were noted: Income from tax-exempt municipal bonds $60,000 Depreciation deducted for tax purposes in excess of depreciation recorded on the books 130,000 Proceeds received from life insurance on death of an insured employee 100,000 Corporate tax rate for 2019 30% Enacted tax rate for future periods 35% Required: 1. Calculate taxable income and tax payable for tax purposes. 2. Prepare Nelson’s income tax journal entry at the end of 2019.