The Accent Corporation shows the following information. On January 1, 2012, Accent purchased a donut machine for
Question:
The Accent Corporation shows the following information. On January 1, 2012, Accent purchased a donut machine for $600,000.
A) Pretax financial income is $3,200,000 in 2012 and $3,500,000 in 2013.
B) Taxable income is expected in future years with an expected tax rate of 40%.
C) The company recognized an extraordinary gain of $200,000 in 2013 (which is fully taxable).
D) Tax-exempt municipal bonds yielded interest of $240,000 in 2013.
E) Half-year convention for 6 years for financial reporting.
F) Straight-line basis depreciation for 4 years for tax purposes.
Required:
1) Compute taxable income and income taxes payable for 2013.
2) Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.
3) Prepare the deferred income taxes presentation for December 31, 2013 balance sheet.
CorporationA Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
Accounting Principles
ISBN: 978-0470534793
10th Edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso