PROBLEM 4 ACCOUNTING FOR INCOME TAX

Here is some information regarding the Prosper Corporation in 2021:

1. Depreciation reported in the annual tax return (SPT) exceeds the depreciation reported in the income statement. The surplus is worth $320,000. The difference will be reversed evenly for $80,000 throughout 20222025.

2. Deposit interest income recognized in 2021 amounted to $25,000.

3. Prosper Corp. records cost for entertainment and representation without the

attachment of Nominative List of $15,000.

4. The result of a stock opname in 2021 shows the existence of slow-moving

items of more than 3 years in the amount of $40,000, so the Company acknowledges an impairment in the value of inventory. The company has previously never recognized the impairment in inventory value. According to the taxation, companies can recognize impairment in the value of inventory if there is a removal news.

5. Payment of rent received in advance on January 1, 2021 amounts to $150,000 for the next three years. Of this amount, $100,000 was reported as income received in advance in the December 31, 2021 financial statements.

6. The effective tax rate for 2021 and forth is 22%.

7. Income tax of $800,000 is payable in the 2021 tax return.

Please use excel, or answer it in a good form. thankypou

Instructions:

1. Calculate Prosper Corp.s taxable income for 2021!

2. Calculate Prosper Corp.s profit before tax for 2021!

3. Prepare the necessary journal(s) to record Prosper Corp.s income tax

expense, deferred tax, and income tax payable for 2021 and 2022, assuming that the taxable income for 2022 is $3,300,000!

PROBLEM 4 - ACCOUNTING FOR INCOME TAX Here is some information regarding the Prosper Corporation in 2021: 1. Depreciation reported in the annual tax return (SPT) exceeds the depreciation reported in the income statement. The surplus is worth $320,000. The difference will be reversed evenly for $80,000 throughout 20222025. 2. Deposit interest income recognized in 2021 amounted to $25,000. 3. Prosper Corp. records cost for entertainment and representation without the attachment of Nominative List of $15,000. 4. The result of a stock opname in 2021 shows the existence of slow-moving items of more than 3 years in the amount of $40,000, so the Company acknowledges an impairment in the value of inventory. The company has previously never recognized the impairment in inventory value. According to the taxation, companies can recognize impairment in the value of inventory if there is a removal news. 5. Payment of rent received in advance on January 1, 2021 amounts to $150,000 for the next three years. Of this amount, $100,000 was reported as income received in advance in the December 31, 2021 financial statements. 6. The effective tax rate for 2021 and forth is 22%. 7. Income tax of $800,000 is payable in the 2021 tax return. Instructions: 1. Calculate Prosper Corp.'s taxable income for 2021! 2. Calculate Prosper Corp.'s profit before tax for 2021! 3. Prepare the necessary journal(s) to record Prosper Corp.'s income tax expense, deferred tax, and income tax payable for 2021 and 2022, assuming that the taxable income for 2022 is $3,300,000! PROBLEM 4 - ACCOUNTING FOR INCOME TAX Here is some information regarding the Prosper Corporation in 2021: 1. Depreciation reported in the annual tax return (SPT) exceeds the depreciation reported in the income statement. The surplus is worth $320,000. The difference will be reversed evenly for $80,000 throughout 20222025. 2. Deposit interest income recognized in 2021 amounted to $25,000. 3. Prosper Corp. records cost for entertainment and representation without the attachment of Nominative List of $15,000. 4. The result of a stock opname in 2021 shows the existence of slow-moving items of more than 3 years in the amount of $40,000, so the Company acknowledges an impairment in the value of inventory. The company has previously never recognized the impairment in inventory value. According to the taxation, companies can recognize impairment in the value of inventory if there is a removal news. 5. Payment of rent received in advance on January 1, 2021 amounts to $150,000 for the next three years. Of this amount, $100,000 was reported as income received in advance in the December 31, 2021 financial statements. 6. The effective tax rate for 2021 and forth is 22%. 7. Income tax of $800,000 is payable in the 2021 tax return. Instructions: 1. Calculate Prosper Corp.'s taxable income for 2021! 2. Calculate Prosper Corp.'s profit before tax for 2021! 3. Prepare the necessary journal(s) to record Prosper Corp.'s income tax expense, deferred tax, and income tax payable for 2021 and 2022, assuming that the taxable income for 2022 is $3,300,000