Question
***PLEASE ANSWER ALL QUESTIONS*** 1. For its first year of operations, Sony Corporation's reconciliation of pretax accounting income to taxable income is as follows: Pretax
***PLEASE ANSWER ALL QUESTIONS***
1. For its first year of operations, Sony Corporation's reconciliation of pretax accounting income to taxable income is as follows:
| Pretax accounting income | $ | 300,000 |
|
|
| Permanent difference |
| (15,000 | ) |
|
|
|
| 285,000 |
|
|
| Temporary difference-depreciation |
| (20,000 | ) |
|
| Taxable income | $ | 265,000 |
|
|
Sony's tax rate is 25%. Assume that no estimated taxes have been paid.
What should Sony report as income tax payable for its first year of operations?
A) $75,000.
B) $71,250.
C) $66,250.
D) $5,000.
2. For its first year of operations, Sony Corporation's reconciliation of pretax accounting income to taxable income is as follows:
| Pretax accounting income | $ | 300,000 |
|
|
| Permanent difference |
| (15,000 | ) |
|
|
|
| 285,000 |
|
|
| Temporary difference-depreciation |
| (20,000 | ) |
|
| Taxable income | $ | 265,000 |
|
|
Sony's tax rate is 25%. Assume that no estimated taxes have been paid.
What should Sony report as its deferred income tax liability as of the end of its first year of operations?
A) $35,000.
B) $20,000.
C) $8,750
D) $5,000.
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Managerial Accounting
Authors: Paul E. Dascher, Jerry R. Strawser, Robert H. Strawser, Ronald M. Copeland
8th Edition
0873937643, 978-0873937641
