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if I could please get the break down of the question as well that would be much appreciated. Thank you! Stellar Corporation has provided the
if I could please get the break down of the question as well that would be much appreciated. Thank you!
Stellar Corporation has provided the following information for the year ended December 31, 2020. $115,600 Stellar Corporation Income Statement For the Year Ended December 31, 2020 Revenue Service Revenue 104.000 Dividend Revenue 11.600 Operating Expenses Supplies Expense 2,100 Depreciation Expense 21,300 Advertising Expense 1.200 Meals and Entertainment Expense 5,800 Rent Expense 9,300 Litigation Expense 7,900 Salaries and Wages Expense 41,700 Warranty Expense 3,800 Operating Income before income tax 93,100 $22,500 Additional Information: 1. 2. 3. 4. 5. Stellar is privately owned, and uses ASPE. The dividend revenue represents dividends received from taxable Canadian corporations. Stellar's income tax rate is 30%. On January 1, 2020, Stellar had a future tax liability of $3,195 related to its property, plant, and equipment (PPE). During the year warranty expense of $3,800 was accrued. One half of this amount was paid during 2020. This is the first year Stellar offers warranties on services rendered. Property, plant, and equipment was purchased for $106,500 on January 1, 2019. These assets are being depreciated on a straight-line basis over five years with no residual value and have a 20% CCA rate. This PPE is considered "eligible equipment" for purposes of the Accelerated Investment Incentive (the "All") (under the All, instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). On July 1, Stellar was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is likely that a settlement will be reached in the next year for $7,900. On November 30, $4,800 cash was paid in advance for four months of advertising, starting Dec. 1. 6. 7. Calculate taxable income and taxes payable for 2020. Taxable income $ Taxes Payable $ e Textbook and Media List of Accounts Prepare the journal entries to record 2020 income taxes (current and future). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit (To record current tax expense.) (To record future tax expense.) e Textbook and Media List of Accounts Explain how the future tax amounts will be shown on the balance sheet. $ Noncurrent Future Tax Liability Current Future Tax Asset $ eTextbook and Media List of Accounts Stellar Corporation has provided the following information for the year ended December 31, 2020. $115,600 Stellar Corporation Income Statement For the Year Ended December 31, 2020 Revenue Service Revenue 104.000 Dividend Revenue 11.600 Operating Expenses Supplies Expense 2,100 Depreciation Expense 21,300 Advertising Expense 1.200 Meals and Entertainment Expense 5,800 Rent Expense 9,300 Litigation Expense 7,900 Salaries and Wages Expense 41,700 Warranty Expense 3,800 Operating Income before income tax 93,100 $22,500 Additional Information: 1. 2. 3. 4. 5. Stellar is privately owned, and uses ASPE. The dividend revenue represents dividends received from taxable Canadian corporations. Stellar's income tax rate is 30%. On January 1, 2020, Stellar had a future tax liability of $3,195 related to its property, plant, and equipment (PPE). During the year warranty expense of $3,800 was accrued. One half of this amount was paid during 2020. This is the first year Stellar offers warranties on services rendered. Property, plant, and equipment was purchased for $106,500 on January 1, 2019. These assets are being depreciated on a straight-line basis over five years with no residual value and have a 20% CCA rate. This PPE is considered "eligible equipment" for purposes of the Accelerated Investment Incentive (the "All") (under the All, instead of using the half-year rule, companies are allowed a first-year deduction using 1.5 times the standard CCA rate). On July 1, Stellar was sued by a competitor. Although the lawsuit has not been finalized, management believes that it is likely that a settlement will be reached in the next year for $7,900. On November 30, $4,800 cash was paid in advance for four months of advertising, starting Dec. 1. 6. 7. Calculate taxable income and taxes payable for 2020. Taxable income $ Taxes Payable $ e Textbook and Media List of Accounts Prepare the journal entries to record 2020 income taxes (current and future). (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit (To record current tax expense.) (To record future tax expense.) e Textbook and Media List of Accounts Explain how the future tax amounts will be shown on the balance sheet. $ Noncurrent Future Tax Liability Current Future Tax Asset $ eTextbook and Media List of Accounts
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