Provide a completed tax worksheet
Provide a completed tax worksheet Prepare, in good form, the 2020 Statement of Cash Flow for Canary using both Direct and Indirect Method.
1. Canary believes that they will satisfy the contract terms for the final $7000 on customer advances in 2022.
2. The mortgage lending institution agreed to accept an issuance of common stock in satisfaction of $30,000 of the principle due.
3. Prior to extinguishing the mortgage payable, interest of $17,000 was incurred. The interest expense is incorporated into Other operating expenses on the income statement of Black Canary Cash Co.
4. Canary uses the same inventory cost flow assumption for tax and financial reporting. Likewise, amortization of intangible assets is deducted at the same rate it is expensed.
5. Plant assets with an original cost of 900,000 were sold for 108,000 cash in January.
6. A new "Canary Cry Amplifier" was purchased for 950,000 in 2020. Canary estimates that the assets have a 5-year useful life with no salvage value. However, according to the MACRS the assets are deductible at a rate of 33%, 40%, 18%, and 9% in 2020, 2021, 2022, and 2023 respectively.
This is what I have right now for deferred tax. Idk if it's right.
Year Tax Rate 40% 2018 2019 Taxable income (Loss) 80,000 (170,000) 110,000 80,000 100,000 120,000 45% 30% 40% 2020 2021 2022 2023 *No future changes in tax rates are known as of 2023. 45% 35% Income Statement (2020) Sales COGS Gross Profit Depreciation Expense Patent Amortization Expense Salaries Expense Other Operating Expenses Other Gain and Losses Pretax Income Tax Expense Net Income 1,967,000 (1,132,500) 834,500 (190,000) (21,000) (400,000) (95,000) 58,000 186,500 ? ? ? Balance Sheet 2020 2019 Current Assets Cash Receiveables 287,100 159,000 150,000 18,000 453,600 217,000 129,000 27,000 86,400 ? Inventory Prepaid Expenses Deferred Tax Asset -- Current Non-Current Assets Deferred Tax Asset - NC Plant Assets ? Accumulated Depreciation 950,000 (190,000) 153,000 41,300 900,000 (850,000) 174,000 1,178,300 Patent Total Assets ? 153,000 25,000 14,000 8,000 168,000 15,000 17,000 0 73,200 0 Current Liabilites Account Payable Salaries Payable Rent Payable Dividend Payable Deferred Tax Liability Current ? Tax Payable ? Non-Current Liabilites Deferred Tax Liability - NC ? Advances from Customers Mortgage Payable Common Stock Additional Pain-In Capital - Preferred Retained Earnings Total Liabilities and Owner's Equity ? 7,000 50,000 700,000 120,000 441,225 40,000 19,000 100,000 400,000 50,000 296,100 1,178,300 Non-current Deferred Tax Asset Liability Enacted Tax Rate 40% 40% 40% Account of Temporary Difference 2020 Receiveables Prepaid Expenses Account Payable Salaries Payable Rent Payable Advances from Customers NOL carryforward to 2021 NOL carryforward to 2022 Depreciation Reverse in 2022 Depreciation Reverse in 2023 Taxble Amounts 159,000 18,000 153,000 25,000 14,000 7,000 64,000 18,000 19,000 104,500 Current Deferred Tax Asset Liability 63,600 7,200 61,200 10,000 5,600 3,150 40% 40% 45% 40% 45% 45% 35% 25,600 8,100 EB 102,400 (86,400) 16,000 BB Changes 70,800 (73,200) (2,400) 8,550 36,575 45,125 (40,000) 5,125 11,250 (41,300) (30,050) 23,375 16,000 2,400 Tax Expense DTA - Current DTL - Current DTA - NC DTL-NC Tax Payable 30,050 5,125 6,600 Year Tax Rate 40% 2018 2019 Taxable income (Loss) 80,000 (170,000) 110,000 80,000 100,000 120,000 45% 30% 40% 2020 2021 2022 2023 *No future changes in tax rates are known as of 2023. 45% 35% Income Statement (2020) Sales COGS Gross Profit Depreciation Expense Patent Amortization Expense Salaries Expense Other Operating Expenses Other Gain and Losses Pretax Income Tax Expense Net Income 1,967,000 (1,132,500) 834,500 (190,000) (21,000) (400,000) (95,000) 58,000 186,500 ? ? ? Balance Sheet 2020 2019 Current Assets Cash Receiveables 287,100 159,000 150,000 18,000 453,600 217,000 129,000 27,000 86,400 ? Inventory Prepaid Expenses Deferred Tax Asset -- Current Non-Current Assets Deferred Tax Asset - NC Plant Assets ? Accumulated Depreciation 950,000 (190,000) 153,000 41,300 900,000 (850,000) 174,000 1,178,300 Patent Total Assets ? 153,000 25,000 14,000 8,000 168,000 15,000 17,000 0 73,200 0 Current Liabilites Account Payable Salaries Payable Rent Payable Dividend Payable Deferred Tax Liability Current ? Tax Payable ? Non-Current Liabilites Deferred Tax Liability - NC ? Advances from Customers Mortgage Payable Common Stock Additional Pain-In Capital - Preferred Retained Earnings Total Liabilities and Owner's Equity ? 7,000 50,000 700,000 120,000 441,225 40,000 19,000 100,000 400,000 50,000 296,100 1,178,300 Non-current Deferred Tax Asset Liability Enacted Tax Rate 40% 40% 40% Account of Temporary Difference 2020 Receiveables Prepaid Expenses Account Payable Salaries Payable Rent Payable Advances from Customers NOL carryforward to 2021 NOL carryforward to 2022 Depreciation Reverse in 2022 Depreciation Reverse in 2023 Taxble Amounts 159,000 18,000 153,000 25,000 14,000 7,000 64,000 18,000 19,000 104,500 Current Deferred Tax Asset Liability 63,600 7,200 61,200 10,000 5,600 3,150 40% 40% 45% 40% 45% 45% 35% 25,600 8,100 EB 102,400 (86,400) 16,000 BB Changes 70,800 (73,200) (2,400) 8,550 36,575 45,125 (40,000) 5,125 11,250 (41,300) (30,050) 23,375 16,000 2,400 Tax Expense DTA - Current DTL - Current DTA - NC DTL-NC Tax Payable 30,050 5,125 6,600
