Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Curry Company reports pretax accounting (book) income of $300,000 for 2019. The items below (included in accounting income, when applicable, in accordance with U.S. GAAP)

image text in transcribed
Curry Company reports pretax accounting (book) income of $300,000 for 2019. The items below (included in accounting income, when applicable, in accordance with U.S. GAAP) cause taxable income to be different than pretax accounting (book) income. 1. Depreciation on the tax return is $70,000; straight line depreciation on the books is $40,000. 2. Rent revenue of $10,000 collected in advance (cash basis) will not be earned until 2020. 3. Fines for pollution appear as an expense of $32,000 on the income statement 4. Life insurance proceeds received on key executive $12,000 5. Bad debts estimated for accounting are $25,000, actual AR written off for tax purposes are $20,000. Curry's tax rate is 20% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2019. Instructions (a) Compute taxable income and income taxes payable for 2019. (On page 2) (b) Prepare the journal entry to record income tax expense, any deferred tax accounts and income taxes payable for 2019. (On page 2) (C) Prepare the income tax expense section of the income statement for 2019. beginning with the line "2019 pretax accounting income." (Show below) (d) Show the relevant sections of the balance sheet for the related tax accounts (Show below) FOR PARTS (a) AND (b) ABOVE, SHOW ALL OF YOUR WORK ON THE NEXT PAGE AND YOU MUST FOLLOW THE FORMAT THAT I HAVE PREVIOUSLY USED. Do parts (c) and (d) below AFTER you complete parts (a) and (b). (c) Income Statement Section (d) Balance Sheet Sections

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Can you see what limitations your purpose imposes on your strategy?

Answered: 1 week ago

Question

18. Show that when r = 2 the multinomial reduces to the binomial.

Answered: 1 week ago