Aktar Bumbershoor, Inc, began operations in 2004. In 2010, the company became a publicly held. Rhonda Littloff, controller, is preparing the 2015 annual financial statements and has gathered the following information pertaining to the accounting for income taxes. For the year ended December 31, 2015. Aktar Bumbershoor, Inc. reported the following revenues and expenses. (No tax information is contained in these figures.) Tax rates existed as of the beginning of 2014 are: 2014 & 2015, 40%, 2016, 38% and 2016 & beyond 35%. Aktar Bumbershoor, Inc. use the calendar year for bothe financial statement and income tax reporting. During 2015, Aktar Bumbershoor, Inc. sold 30 retractable wheel assembly units for $500 each tp Spoarty Aircraft parts Co. Jan Dean, the plant cost accountant, estimated warrancy expense per unit at $75 based on historical data. For financial purpose, warranty expenses are recognised at the point of sale, and for tax purposes at the time paid. Jan estimates actual warrantee costs per year would be: Aktar Bumbershoor, Inc. insurance its key officers for death and accidents. The premium on this policy is $31, 00 per year. The premium is expected to remain the same through 2016. During 2015, the company received $ 90, 000 check in settlement of a claim against the policy. Aktar collected $50, 000 in rent on a bulking in owns. The rent is for a 5 year period beginning January 1, 2014. E. Clapton, Production superintendent recensly spoke with the plant manager concerning the status of some of the production equipment. He asked if a new system could be purchased. On January 8, 2013. Steve Miller, the plant manager, agreed with Claplon and purchased a new conveyer belt unit for $ 75, 000. Sreve estimated the salvage value to be $ 5, 000 and the usefull life to 10 years. For financial purposes, the equipment was depreciated using the straight line method and for tax purposes, the maching was depreciated using the following MACRS table: Identify each of the financial statement and income tax reporting differences listed above for Aktar Bumbershoor,Inc. as either temporary of permanent differences. Explain your answer. For the year ended December 31, 2015, compute Aktar Bumbershoor,Inc. cabable income tax liability. For the year ended December 31, 2015, calculate the deferred tax that relates to the differences identified in Requirment A prepare the journal entries required form the above information for Aktar Bumbershoor,Inc. for the year ended December 31, 2015. Indicate the presentations of Deferred Tax and related items on the Balance Sheet for December 31, 2015. Aktar Bumbershoor, Inc, began operations in 2004. In 2010, the company became a publicly held. Rhonda Littloff, controller, is preparing the 2015 annual financial statements and has gathered the following information pertaining to the accounting for income taxes. For the year ended December 31, 2015. Aktar Bumbershoor, Inc. reported the following revenues and expenses. (No tax information is contained in these figures.) Tax rates existed as of the beginning of 2014 are: 2014 & 2015, 40%, 2016, 38% and 2016 & beyond 35%. Aktar Bumbershoor, Inc. use the calendar year for bothe financial statement and income tax reporting. During 2015, Aktar Bumbershoor, Inc. sold 30 retractable wheel assembly units for $500 each tp Spoarty Aircraft parts Co. Jan Dean, the plant cost accountant, estimated warrancy expense per unit at $75 based on historical data. For financial purpose, warranty expenses are recognised at the point of sale, and for tax purposes at the time paid. Jan estimates actual warrantee costs per year would be: Aktar Bumbershoor, Inc. insurance its key officers for death and accidents. The premium on this policy is $31, 00 per year. The premium is expected to remain the same through 2016. During 2015, the company received $ 90, 000 check in settlement of a claim against the policy. Aktar collected $50, 000 in rent on a bulking in owns. The rent is for a 5 year period beginning January 1, 2014. E. Clapton, Production superintendent recensly spoke with the plant manager concerning the status of some of the production equipment. He asked if a new system could be purchased. On January 8, 2013. Steve Miller, the plant manager, agreed with Claplon and purchased a new conveyer belt unit for $ 75, 000. Sreve estimated the salvage value to be $ 5, 000 and the usefull life to 10 years. For financial purposes, the equipment was depreciated using the straight line method and for tax purposes, the maching was depreciated using the following MACRS table: Identify each of the financial statement and income tax reporting differences listed above for Aktar Bumbershoor,Inc. as either temporary of permanent differences. Explain your answer. For the year ended December 31, 2015, compute Aktar Bumbershoor,Inc. cabable income tax liability. For the year ended December 31, 2015, calculate the deferred tax that relates to the differences identified in Requirment A prepare the journal entries required form the above information for Aktar Bumbershoor,Inc. for the year ended December 31, 2015. Indicate the presentations of Deferred Tax and related items on the Balance Sheet for December 31, 2015
