The following information is available for the first four years of operations for Cooper Company: 1....
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The following information is available for the first four years of operations for Cooper Company: 1. Year Taxable Income 2010 $500,000 2011 330,000 2012 400,000 2013 410,000 2. For 2010, sales on account were $350,00 and cash collections were $300,000. 3. On January 1, 2011 heavy equipment costing $600,000 was purchased. The equipment had a life of 4 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2011 $198,000 2012 $270,000 2013 $132,000 Total $600,000 3. On January 1, 2011, $240,000 was collected in advance for rental of a building for a three- year period. The entire $240,000 was reported as taxable income in 2011, but $160,000 of the $240,000 was reported as unearned revenue at December 31, 2011 for book purposes. Services related to the $160,000 were completed in 2012. 4. For 2011, sales on account were $500,00 and cash collections were $510,000. 5. For 2012, sales on account were $600,00 and cash collections were $580,000. 6. For 2013, sales on account were $580,00 and cash collections were $570,000. 7. For all years, temporary differences related to A/R are expected to reverse out within a year. 8. The enacted tax rates are 40% for 2011-2013 and 35% for 2010. Required For 2010-2013 determine book income, the balance in the deferred tax accounts, and prepare the journal entry for taxes. The following information is available for the first four years of operations for Cooper Company: 1. Year Taxable Income 2010 $500,000 2011 330,000 2012 400,000 2013 410,000 2. For 2010, sales on account were $350,00 and cash collections were $300,000. 3. On January 1, 2011 heavy equipment costing $600,000 was purchased. The equipment had a life of 4 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below: Tax Depreciation 2011 $198,000 2012 $270,000 2013 $132,000 Total $600,000 3. On January 1, 2011, $240,000 was collected in advance for rental of a building for a three- year period. The entire $240,000 was reported as taxable income in 2011, but $160,000 of the $240,000 was reported as unearned revenue at December 31, 2011 for book purposes. Services related to the $160,000 were completed in 2012. 4. For 2011, sales on account were $500,00 and cash collections were $510,000. 5. For 2012, sales on account were $600,00 and cash collections were $580,000. 6. For 2013, sales on account were $580,00 and cash collections were $570,000. 7. For all years, temporary differences related to A/R are expected to reverse out within a year. 8. The enacted tax rates are 40% for 2011-2013 and 35% for 2010. Required For 2010-2013 determine book income, the balance in the deferred tax accounts, and prepare the journal entry for taxes.
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a Date Calculation of Pretax Income Taxable income Add Tax depreci... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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