Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Exercise 16-20 (Algo) Deferred taxes, change in tax rates [LO16-3, 16-6] Shwonson Industries reported a deferred tax asset of $8.00 million for the year ended

image text in transcribed
image text in transcribed
Exercise 16-20 (Algo) Deferred taxes, change in tax rates [LO16-3, 16-6] Shwonson Industries reported a deferred tax asset of $8.00 million for the year ended December 31, 2020 related to a temporary difference of $32 million. The tax rate was 25%. The temporary difference is expected to reverse in 2022, at which time the deferred tax asset will reduce taxable income. There are no other temporary differences in 2020-2022. Assume a new tax law is enacted in 2021 that causes the tax rate to change from 25% to 15% beginning in 2022 (The rate remains 25% for 2021 taxes.) Taxable income in 2021 is $42 million Required: 1. Prepare the appropriate journal entry to record Shwonson's income tax expense in 2021 2. What effect, will enacting the change in the 2022 tax rate, have on Shwonson's 2021 net income? es Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare the appropriate journal entry to record Shwonson's income tax expense in 2021. (If no entry is required for a transaction/event select No Soumal entry required in the first account field. Enter your answers in millions rounded to 2 decimal places (1.4., 5,500,000 should be entered as 5.50).) View transaction list Journal entry worksheet 2021 that causes the tax rate to change from 25% to 15% beginning in 2022. (The rate remains 25% for 2021 taxes) Taxable income in 2021 is $42 million Required: 1. Prepare the appropriate journal entry to record Shwonson's income tax expense in 2021 2. What effect, will enacting the change in the 2022 tax rate, have on Shwonson's 2021 net income? Complete this question by entering your answers in the tabs below. Required 1 Required 2 COS What effect, will enacting the change in the 2022 tax rate, have on Shwonson's 2021 net income? (Enter your answer in million rounded to 1 decimal place de 5,500,000 should be entered as 5.5).) Swanson's 2021 net income wit million

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

Software Engineering Reviews And Audits

Authors: Boyd L. Summers

1st Edition

143985145X, 978-1439851456

More Books

Students also viewed these Accounting questions

Question

1. Use essay questions as well as multiple-choice items on a test.

Answered: 1 week ago