Dandarion company is currently preparing its tax return report, after preparing and revising the report related...

  
 

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Dandarion company is currently preparing its tax return report, after preparing and revising the report related for 4 years you have illustrated the following information related to taxable income to your manager: 2017 250,000 2018 180,000 2019 270,000 2020 390,000 Your manager is not satisfied with this data and he asked you to give him details of taxable income calculations, and you have extracted the following information to help you prepare this report: Note (1): based on the company's records, the manager has authorized the payment of charity contribution in both 2018 and 2019 with value of 20,000 and 18,000 respectively Note (2): at the beginning of 2017, the company had cumulative future taxable differnces total of 120,000 and cumulative future deductible differnces of 70,000. Note (3): as for previously recognized temporary cumulative differnces you have the following additional data: a. One of the differnces was related to an installment sale that was entirely recognized in 2016 for book purposes but this sale is recognized for tax purposes as follows: 40,000 in 2017 and 40,000 in 2019. b. One of the differnces is related to 40,000 prepaid insurance policy that will be recognized entirely in 2020. c. One of the differnces is related to unearned rent revenues total of 70,000 which is collected during 2015 and will expire equally over the following 2 years following 2015 Note (4) during 2020 the company received a government grant which is not taxable by government laws total of 6,600$. Note (5) excess tax depreciation over book depreciation in 2018 is 20,000 which will be Note (5) excess tax depreciation over book depreciation in 2018 is 20,000 which will be reversed equally over the following 4 years. Note (6) warranty expenses recorded for book purposes in 2019 is 30,000 which will be paid and considered for tax purposes in 2020. Note (7) tax rate for all years is 2017 and 2018 is 30% which is enacted since 2010 and in 2019 a new tax rate was announced to be applied for 2019 and all subsequent years which is 40%. Note (8) the company did expect to operate profitably in future Required: 1. Calculate pretax income for all years, and show calculations 2. Prepare the journal entries for all years 3. What is the balance of DTL at the end of: a. 2017 b. 2018 c. 2019 d. 2020 4. what is balance of DTA at the end of: a. 2017 b. 2018 c. 2019 d. 2020 5. prepare the income statement for the year of 2019 Dandarion company is currently preparing its tax return report, after preparing and revising the report related for 4 years you have illustrated the following information related to taxable income to your manager: 2017 250,000 2018 180,000 2019 270,000 2020 390,000 Your manager is not satisfied with this data and he asked you to give him details of taxable income calculations, and you have extracted the following information to help you prepare this report: Note (1): based on the company's records, the manager has authorized the payment of charity contribution in both 2018 and 2019 with value of 20,000 and 18,000 respectively Note (2): at the beginning of 2017, the company had cumulative future taxable differnces total of 120,000 and cumulative future deductible differnces of 70,000. Note (3): as for previously recognized temporary cumulative differnces you have the following additional data: a. One of the differnces was related to an installment sale that was entirely recognized in 2016 for book purposes but this sale is recognized for tax purposes as follows: 40,000 in 2017 and 40,000 in 2019. b. One of the differnces is related to 40,000 prepaid insurance policy that will be recognized entirely in 2020. c. One of the differnces is related to unearned rent revenues total of 70,000 which is collected during 2015 and will expire equally over the following 2 years following 2015 Note (4) during 2020 the company received a government grant which is not taxable by government laws total of 6,600$. Note (5) excess tax depreciation over book depreciation in 2018 is 20,000 which will be Note (5) excess tax depreciation over book depreciation in 2018 is 20,000 which will be reversed equally over the following 4 years. Note (6) warranty expenses recorded for book purposes in 2019 is 30,000 which will be paid and considered for tax purposes in 2020. Note (7) tax rate for all years is 2017 and 2018 is 30% which is enacted since 2010 and in 2019 a new tax rate was announced to be applied for 2019 and all subsequent years which is 40%. Note (8) the company did expect to operate profitably in future Required: 1. Calculate pretax income for all years, and show calculations 2. Prepare the journal entries for all years 3. What is the balance of DTL at the end of: a. 2017 b. 2018 c. 2019 d. 2020 4. what is balance of DTA at the end of: a. 2017 b. 2018 c. 2019 d. 2020 5. prepare the income statement for the year of 2019

Answer rating: 100% (QA)

1 Pretax income calculation Pretax income Taxable income Taxes payable 2017 Taxable income 250000 20000 18000 Taxes payable Taxable income x Tax rate 250000 20000 18000 x 30 250000 20000 18000 x 03 25... View the full answer