The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows: 20X8 20X9 Revenues
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Question:
The pre-tax income statements for Moonstone Ltd. for two years (summarized) were as follows:
20X8 | 20X9 | ||||||
Revenues | $ | 298,000 | $ | 362,000 | |||
Expenses | 197,000 | 253,000 | |||||
Pre-tax income | $ | 101,000 | $ | 109,000 | |||
For tax purposes, the following income tax differences existed:
- Revenues on the 20X9 statement of profit and loss include $53,000 rent, which is taxable in 20X8 but was unearned at the end of 20X8 for accounting purposes.
- Expenses on the 20X9 statement of profit and loss include political contributions of $20,500, which are not deductible for income tax purposes.
- Expenses on the 20X8 statement of profit and loss include $22,500 of estimated warranty costs, which are not deductible for income tax purposes until 20X9.
Required:
1. What was the accounting carrying value and tax basis for unearned revenue and the warranty liability at the end of 20X8 and 20X9? (Leave no cells blank - be certain to enter "0" wherever required.)
Year 20X8 20X9
Unearned Rent Warranty Unearned Rent Warranty
Accounting carrying value
Tax basis
Related Book For
Intermediate Accounting
ISBN: 978-0470161012
9th Canadian Edition, Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield.
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