Question

Refer to E18-12 for Sayaka Tar and Gravel Ltd., and assume the same facts for the fiscal year ending December 31, 2011. For the second year of operations, Sayaka made progress on the construction of the road for the municipality. The account balances at December 31, 2012, for the construction project and the accounting and tax balances of accounts related to the equipment used for construction follow (the balances at December 31, 2011, are also listed):
Sayaka’s tax rate continues to be 45% for 2012 and subsequent years. Income before income tax for the year ended December 31, 2012, was $120,000.
Instructions
(a) Calculate the future income tax asset or liability balances at December 31, 2012.
(b) Calculate taxable income and income taxes payable for 2012.
(c) Prepare the journal entries to record income taxes for 2012.
(d) Prepare a comparative income statement for 2011 and 2012, beginning with the line “Income before income taxes.”
(e) Provide the comparative balance sheet presentation for any resulting future tax balance sheet accounts at December 31, 2011 and 2012. Be specific about the classification.
(f) Repeat the balance sheet presentation in part (e) assuming Sayaka follows IFRS.


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  • CreatedAugust 23, 2015
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