{ "key_pair_value_system": true, "answer_rating_count": "", "question_feedback_html": { "html_star": "", "html_star_feedback": "" }, "answer_average_rating_value": "", "answer_date_js": "2024-06-28T08:26:47-04:00", "answer_date": "2024-06-28 08:26:47", "is_docs_available": null, "is_excel_available": null, "is_pdf_available": null, "count_file_available": 0, "main_page": "student_question_view", "question_id": "4274489", "url": "\/study-help\/questions\/problem-4-for-the-year-ended-december-31-2017-micah-4274489", "question_creation_date_js": "2024-06-28T08:26:47-04:00", "question_creation_date": "Jun 28, 2024 08:26 AM", "meta_title": "[Solved] Problem 4 For the year ended December 31, | SolutionInn", "meta_description": "Answer of - Problem 4 For the year ended December 31, 2017, Micah Company, had pretax financial income of $830,000 in its first ye | SolutionInn", "meta_keywords": "problem,4,year,ended,december,31,2017,micah,company,pretax,financial,income", "question_title_h1": "Problem 4 For the year ended December 31, 2017, Micah Company, had pretax financial income of $830,000 in its first year of operations. When reconciling", "question_title": "Problem 4 For the year ended December 31, 2017, Micah Company, had", "question_title_for_js_snippet": "Problem 4 For the year ended December 31, 2017, Micah Company, had pretax financial income of $830,000 in its first year of operations When reconciling financial income with taxable income, Micah Company noted the following items 1) Micah had $412,000 of excess tax depreciation since it used an accelerated depreciation method This difference will reverse equally over a four year period, 2018 2021 2) Micah accrued an $83,000 litigation accrual on its financial statements due to pending litigation It is estimated that the litigation liability will be paid in 2021 3) Micah received $73,000 pre payment of rent revenue The rent revenue will be recognized during the last year of the lease, 2021 4) Micah earned $33,000 of interest income from New York municipal bonds Interest revenue from the New York bonds is expected to be $33,000 each year until their maturity at the end of 2021 5) Micah has an enacted tax rate of 30 for all years Part 1 Prepare a reconciliation from pretax financial income to taxable income for the year ended December 31, 2017 Pretax accounting income $830,000 Taxable income Part 2 Calculate the deferred tax (asset) and liability at the end of 2017 Part 3 Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2017 Part 4 How would the deferred tax asset and liability be reported on the 12 31 2017 balance sheet ", "question_description": "

Problem 4 <\/p>

For the year ended December 31, 2017, Micah Company, had pretax financial income of $830,000 in its first year of<\/p>

operations. When reconciling financial income with taxable income, Micah Company noted the following items:<\/p>

1) Micah had $412,000 of excess tax depreciation since it used an accelerated depreciation method. This difference<\/p>

will reverse equally over a four-year period, 2018-2021.<\/p>

2) Micah accrued an $83,000 litigation accrual on its financial statements due to pending litigation. It is estimated<\/p>

that the litigation liability will be paid in 2021.<\/p>

3) Micah received $73,000 pre-payment of rent revenue. The rent revenue will be recognized during the last year of<\/p>

the lease, 2021.<\/p>

4) Micah earned $33,000 of interest income from New York municipal bonds. Interest revenue from the New York<\/p>

bonds is expected to be $33,000 each year until their maturity at the end of 2021.<\/p>

5) Micah has an enacted tax rate of 30% for all years.<\/p>

<\/p>

Part 1: Prepare a reconciliation from pretax financial income to taxable income for the year ended December 31, 2017<\/p>

<\/p>

Pretax accounting income $830,000<\/p>

Taxable income<\/p>

<\/p>

Part 2: Calculate the deferred tax (asset) and liability at the end of 2017.<\/p>

<\/p>

Part 3: Prepare the journal entry to record income tax expense, deferred taxes, and the income taxes payable for 2017.<\/p>

<\/p>

Part 4: How would the deferred tax asset and liability be reported on the 12\/31\/2017 balance sheet?<\/p>", "transcribed_text": "", "related_book": { "title": "Data Analysis And Decision Making", "isbn": "538476125, 978-0538476126", "edition": "4th Edition", "authors": "Christian Albright, Wayne Winston, Christopher Zappe", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/415.jpg", "uri": "\/textbooks\/data-analysis-and-decision-making-4th-edition-415", "see_more_uri": "" }, "free_related_book": { "isbn": "3540855688", "uri": "\/textbooks\/computable-models-of-the-law-languages-dialogues-games-ontologies-2008th-edition-978-3540855682-298102", "name": "Computable Models Of The Law Languages Dialogues Games Ontologies", "edition": "2008th Edition" }, "question_posted": "2024-06-28 08:26:47", "see_more_questions_link": "\/study-help\/questions\/business-human-resource-management-2020-May-22", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/the-yearend-adjusted-trial-balance-of-aggies-corporation-included-the", "description": "The year-end adjusted trial balance of Aggies Corporation included the following account balances: Retained Earnings, $230,000; Service Revenue, $900,000; Salaries Expense, $390,000; Rent Expense,...", "stars": 3 }, { "url": "\/study-help\/business-statistics-in-practice\/b-what-do-you-conclude-1982232", "description": "=+b) What do you conclude?", "stars": 3 }, { "url": "\/refer-to-the-information-for-deporte-company-above-deporte-company-produces", "description": "Refer to the information for Deporte Company above. 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The Professors Pension Fund has all its money invested in two bonds, X and...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/i-need-some-help-with-the-reconciliation-and-explanation-of-4274488", "next": "\/study-help\/questions\/i-am-really-struggling-to-understand-this-assignment-i-have-4274490" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Problem 4 For the year ended December 31, 2017, Micah Company, had", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/problem-4-for-the-year-ended-december-31-2017-micah-4274489" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } }} }