BBY is a calendar year accrual method corporation with a tax rate of 21 percent. It had $5,000,000 of financial income before making the following cash payments on December 31, 20X1: a. $4,000 paid to a consultant for work to be performed in January 20X2. b. $600,000 for equipment delivered on December 1, 20X1. The equipment has a useful life of 10 years for financial accounting and 7 years for tax accounting. This was the only asset purchased in 20X1. (MACRS mid-quarter percentage is 3.57. The Code Sec. 179 deduction was not taken.) c. $17,000 for property tax for the first six months of 20X2. d. $84,000 for a two-year office lease beginning December 1, 20X1. e. $230,000 for inventory purchases. $100,000 was on-hand on December 31, 20X1.

What are Temporary and Permanent differences?

Also,

For each of these expenditures:

a. How are these expenditures reported for financial and taxable income? 

b. What is the total tax expense? 

c. What is the current tax expense? 

d. What is the journal entry to record the tax expense, including the current and deferred components

Answer rating: 100% (QA)

Expendituras Transaction No Einancial inceme Taxable inceme nco... View the full answer