Sega Corporation reported the following information at the beginning of its current fiscal year: Deferred income...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Sega Corporation reported the following information at the beginning of its current fiscal year: Deferred income tax asset (warranties) $ 4,500 (dr) Deferred income tax liability (depreciable assets) 10,500 (cr) During the year, Sega reports the following information: -Pre-tax accounting loss was $120,000 and the tax rate was 32% which is expected to remain stable in the future. -Depreciation expense was $70,000 and the CCA was $0. The carrying amount of property, plant, and equipment at the end of the year was $400,000 while the UCC was $435,000; -Warranty expense was reported at $40,000 while actual cash paid out was $30,000. The warranty liability had a year-end balance of $25,000. -No other items affected deferred tax amounts other than these transactions. Any tax losses are to be carried forward. -A non-taxable dividend of $10,000 was received in the year. Required: 1) Determine the amount of NBV and UCC at the beginning of the year. 2) Determine the tax loss or taxable income for the year. 3) Prepare the journal entries to record income tax for the year. 4) Provide the income statement section commencing with "Net income before taxes." Sega Corporation reported the following information at the beginning of its current fiscal year: Deferred income tax asset (warranties) $ 4,500 (dr) Deferred income tax liability (depreciable assets) 10,500 (cr) During the year, Sega reports the following information: -Pre-tax accounting loss was $120,000 and the tax rate was 32% which is expected to remain stable in the future. -Depreciation expense was $70,000 and the CCA was $0. The carrying amount of property, plant, and equipment at the end of the year was $400,000 while the UCC was $435,000; -Warranty expense was reported at $40,000 while actual cash paid out was $30,000. The warranty liability had a year-end balance of $25,000. -No other items affected deferred tax amounts other than these transactions. Any tax losses are to be carried forward. -A non-taxable dividend of $10,000 was received in the year. Required: 1) Determine the amount of NBV and UCC at the beginning of the year. 2) Determine the tax loss or taxable income for the year. 3) Prepare the journal entries to record income tax for the year. 4) Provide the income statement section commencing with "Net income before taxes."
Expert Answer:
Answer rating: 100% (QA)
Warranty provisions are disallowed in income tax and allowed on actual cash payment basis Book profi... View the full answer
Related Book For
Posted Date:
Students also viewed these general management questions
-
Kalitta Corporation reported the following information at the beginning of its current fiscal year: Deferred income tax asset (warranties) $ 4,500 (dr) Deferred income tax liability (depreciable...
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1-5. Ivan's grandfather died and left a portfolio of municipal bonds. In 2012, they pay Ivan...
-
You have recently been hired as a fund manager in the portfolio management team of a bank. Your Director, John Tan has arranged a meeting next week to present an investment proposal to a prospective...
-
On January 10, 2010, Gonzalez Co. sold merchandise on account to Ernst for $6,000, terms n/30. On February 9 Ernst gave Gonzalez Co. a 7% promissory note in settlement of this account. Prepare the...
-
Consider all the factors of production: labor, natural resources, capital, entrepreneurs, and technology. Is each resource a vital part of the school you attend or the company for which you work?...
-
Computing units in process, units completed, and equivalent production Using the data presented below, determine which figures should be inserted in the blank spaces. Beginning Units Units in Started...
-
1. What functional strategies at Starbucks help the company to achieve superior financial performance? 2. Identify the resources, capabilities, and distinctive competencies of Starbucks? 3. How do...
-
4) It is 1998. The spot and 30-day forward rates for the Dutch guilder are $.3075 and $.3120, respectively. The guilder is said to be selling at a forward A) premium of 16.83% B) premium of 17.56% C)...
-
You are an Examiner for the Refund Integrity Program in the GST/HST Audit Division of the Canada Revenue Agency (CRA). Using sophisticated analytical tools, you are able to identify GST/HST returns...
-
solve with correct calculation The following reconciling items are applicable to the bank reconciliation for Ellington Company. Indicate which items will require a journal entry. a. Outstanding...
-
A wheat famer is concerned about a potential glut of wheat next summer due to unusually warm weather and higher than expected rain fall. Market: CME's SRW Wheat futures (Symbol ZW) contract is an...
-
List three methods use to interpret the information required to carry out a remove, inspect, repair and refit tyres and tubes and balance wheels and tyres on a light vehicle
-
create a new member. A member has a name, and an optional email address. If the member has an email address it must be unique (two different members cannot have the same email address). When a member...
-
Based on analysis, deck-building business is best Only consider what is an added cost and different from current business, if shifting things from current business to new then do not include
-
For the manufacturing budget preparation. What other forecast or budget/s affects the raw materials budget and in what way? How would a growth in the sales forecast affect the raw materials budget?...
-
Repressive coping is a variation of which issue with problem identification? Question 13 options: Stakeholder framing Perceptual defence Solution-focused problems Mental models Decisive leadership
-
Create a data model for one of the processes in the end-of-chapter Exercises for Chapter 4. Explain how you would balance the data model and process model.
-
Oshawa Motor Parts issued 100,000 stock options to its employees. The company granted the stock options at-the-money, when the share price was $30. These options have no vesting conditions. By...
-
On January 1, 2021, Portside Co. issued a $10 million, 8%, nine-year convertible bond with annual coupon payments. Each $1,000 bond was convertible into 25 shares of Portsides common shares....
-
When shares are repurchased at more than their original issue price, then held in treasury or cancelled, the journal entry potentially includes which of the following components? Account Debit to...
-
Interpreting a labor schedule with learning. Below is a schedule prepared by the manager of Flambaux Company in order to plan the production of a new gear assembly for which the company is...
-
Estimating service department labor cost using learning curves The warranty repair de- partment of the Biggie Company experiences a 90 percent learning curve effect on the repair of new products. The...
-
Learning curve formulas and tables The time required to build the first unit of a product with an 85 percent learning curve effect is 250 hours. A total of 15 units will be built. REQUIRED a. Use the...
Study smarter with the SolutionInn App