ProVision, Inc. Information for Tax Accrual Research Project Income-related facts for the current year: 500,000 Income before income taxes (on the income statement) 300,000 Book depreciation (included in income before income taxes) 450,000 Tax depreciation 60,000 Bad debt expense (included in income before income taxes) 75,000 Accounts receivable written off this year 125,000 Product warranty expense (included in income before income taxes) 90,000 Cost of warranty claims satisfied this year 60,000 Rent income (included in income before income taxes) 75,000 Rent collected this year 35,000 State and local bond interest included in income before income taxes 40,000 Domestic production activities deduction for this year Cumulative deductible (taxable) temporary differences, beginning of year: (260,000) Depreciation 40,000 Bad debts 35,000 Warranty reserve 10,000 Prepaid rental income The questions are: ? (Excel) A schedule reconciling from book income to taxable income, separating permanent and temporary differences between book and taxable income. ? (Excel) An inventory of cumulative temporary differences, including their changes during the current year. This worksheet should also calculate the beginning and ending balances in current deferred and noncurrent deferred tax asset or liability. (You may wish to use the slide ?Calculate Deferred Tax Expense/Benefit? from the PwC presentation in creating this schedule.) ? (Word) Narrative explaining your permanent and temporary differences. Use a paragraph to explain the nature of each difference (including its direction) in your reconciliation schedule. ? (Word) Journal entries to record current and deferred tax provisions for the current year.

ACC 625 Research Project - Fall, 2014 Your assignment is to create a U.S. income tax accrual case for ProVision, Inc. A separate Excel file contains a spreadsheet which summarizes current-year income-related information and beginning-of-year temporary differences for ProVision. Use this information to prepare your submission. Your submission must include the following elements: (Excel) A schedule reconciling from book income to taxable income, separating permanent and temporary differences between book and taxable income. (Excel) An inventory of cumulative temporary differences, including their changes during the current year. This worksheet should also calculate the beginning and ending balances in current deferred and noncurrent deferred tax asset or liability. (You may wish to use the slide \"Calculate Deferred Tax Expense/Benefit\" from the PwC presentation in creating this schedule.) (Word) Narrative explaining your permanent and temporary differences. Use a paragraph to explain the nature of each difference (including its direction) in your reconciliation schedule. (Word) Journal entries to record current and deferred tax provisions for the current year. You are not required to include any uncertain items in your submission. You may assume a flat 35% corporate income tax rate for all income in all periods. Your case is due at the time of your exam. ProVision, Inc. Information for Tax Accrual Research Project Income-related facts for the current year: 500,000 Income before income taxes (on the income statement) 300,000 Book depreciation (included in income before income taxes) 450,000 Tax depreciation 60,000 Bad debt expense (included in income before income taxes) 75,000 Accounts receivable written off this year 125,000 Product warranty expense (included in income before income taxes) 90,000 Cost of warranty claims satisfied this year 60,000 Rent income (included in income before income taxes) 75,000 Rent collected this year 35,000 State and local bond interest included in income before income taxes 40,000 Domestic production activities deduction for this year Cumulative deductible (taxable) temporary differences, beginning of year: (260,000) Depreciation 40,000 Bad debts 35,000 Warranty reserve 10,000 Prepaid rental income