A lease agreement that qualifies as a finance lease calls for annual lease payments of $30,500 over a six-year lease term with the first payment on January 1 , the beginning of the lease. The interest rate is 4.5%. If the lessee's fiscal year is the calendar year: Requirements: Show your answers a. What would be the amount of the lease liability that the lessee would report on its balance sheet at the end of the year, December 31 ? b. What would be the interest payable? - A lease agreement that qualifies as a finance lease calls for annual lease payments of $30,500 over a six-year lease term with the first payment on January 1 , the beginning of the lease. The interest-rate is 4.5%. If the lessee's fiscal year is the calendar year: Requirements: Show your answers What would be the amounts related to the lease that the lessee would report in its income statement for the first year ended December 31 ? Reid company reports 2024 pretax accounting income of $15 million, but because of a single temporary difference, taxable income is only $10 million. No temporary differences existed at the beginning of the year, and the tax rate was 30%. Requirement: a. Show the amount for each of the four steps: a. Step 1: Tax payable b. Step 2: Deferred tax liability: c. Step 3: Deferred tax change: d. Step 4: Tax expense plug: b. Prepare the appropriate journal entry to record income taxes. Problem 4: Brown Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes. Four years after its purchase, one of Brown's manufacturing machines has a book value of $600,000. There were no other temporary differences and no permanent differences. Taxable income was $10 million and Brown's tax rate is 25%. Requirement: Show your answers a. Show the amount for each of the four steps: a. Step 1: Tax payable b. Step 2: Deferred tax liability: C. Step 3: Deferred tax change: d. Step 4: Tax expense plug: Brown Manufacturing uses straight-line depreciation for financial statement reporting and is able to deduct 100% of the cost of equipment in the year the equipment is purchased for tax purposes Four years after its purchase, one of Brown's manufacturing machines has a book value of $600,000. There were no other temporary differences and no permanent differences. Taxable income was $10 million and Brown's tax rate is 25%. Requirement: Show your answers a. Show the amount for each of the four steps: a. Step 1: Tax payable b. Step 2: Deferred tax liability: c. Step 3: Deferred tax change: d. Step 4: Tax expense plug: b. What is the deferred tax liability to be reported in the balance sheet? C. Assuming that the deferred tax liability balance was $175,000 the previous year, prepare the appropriate journal entry to record income taxes this year
