Question

For the fiscal year ended November 30, 2017, Vibank Ltd. (Vibank) has income before taxes of $2,250,000. Vibank's tax return shows taxable income of $2,475,000 for that year. The tax basis of Vibank's assets exceeded the accounting basis by $400,000 on November 30, 2017 and the balance in the future income tax account on November 30, 2016 was a credit of $150,000. All temporary differences pertain to non-current assets. Vibank has a tax rate of 25 percent.

Required:
a. What amount should Vibank report for future income taxes on its November 30, 2017 balance sheet?
b. What is Vibank's net income for fiscal 2017?
c. What would Vibank's net income be if it used the taxes payable method?
d. Explain the difference between (b) and (c).
e. Prepare the journal entry required to record Vibank's income tax expense for fiscal 2017, using the deferred (future) income tax method.



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  • CreatedFebruary 26, 2015
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