SungSam International began business in 2018. Its book income before tax was $3,750,000. All of SamSung's...

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SungSam International began business in 2018. Its book income before tax was $3,750,000. All of SamSung's book/tax differences are summarized below. Its tax rate was 20%. • SungSam purchased equipment for $500,000 on January 1. SungSam depreciated the equipment straight line over 10 years with no salvage value for books. For tax purposes, SungSam expensed $250,000 in 2018 and $250,000 in 2019. • SungSam accrued a contingent loss of $200,000 related to litigation in 2018. The case is not expected to come to court for several years. SungSam recorded a write down for obsolete inventory of $80,000 (i.e., it wrote down inventory previously worth $100,000 to $20,000). SungSam did not "scrap" the inventory for tax purposes. • SungSam acquired another company on January 1, 2018 and recorded goodwill of $1,000,000. It will amortize this goodwill for tax purposes over 15 years (straight-line). It did not impair the goodwill in 2018 for book purposes. 1. Provide the tax accrual for 2018. Do not net the DTAS and DTLS in this journal entry. Show the computations for all of the impacted accounts. 2. What will SungSam report on its balance sheet related to the tax accounts? Be specific about what section of the balance sheet items will be reported. SungSam International began business in 2018. Its book income before tax was $3,750,000. All of SamSung's book/tax differences are summarized below. Its tax rate was 20%. • SungSam purchased equipment for $500,000 on January 1. SungSam depreciated the equipment straight line over 10 years with no salvage value for books. For tax purposes, SungSam expensed $250,000 in 2018 and $250,000 in 2019. • SungSam accrued a contingent loss of $200,000 related to litigation in 2018. The case is not expected to come to court for several years. SungSam recorded a write down for obsolete inventory of $80,000 (i.e., it wrote down inventory previously worth $100,000 to $20,000). SungSam did not "scrap" the inventory for tax purposes. • SungSam acquired another company on January 1, 2018 and recorded goodwill of $1,000,000. It will amortize this goodwill for tax purposes over 15 years (straight-line). It did not impair the goodwill in 2018 for book purposes. 1. Provide the tax accrual for 2018. Do not net the DTAS and DTLS in this journal entry. Show the computations for all of the impacted accounts. 2. What will SungSam report on its balance sheet related to the tax accounts? Be specific about what section of the balance sheet items will be reported.

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Tax accrual for 2018 Book income before tax 3750000 Booktax differences Depreciation 50000010 250000 ... View the full answer