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Show calculations. Carla Vista Inc. began business on January 1, 2021. Its pretax financial income for the first 2 years was as follows: 2021 2022
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Carla Vista Inc. began business on January 1, 2021. Its pretax financial income for the first 2 years was as follows: 2021 2022 $330,000 650,000 The following items caused the only differences between pretax financial income and taxable income. In 2021, the company collected $387,000 of rent of this amount, s129,000 was earned in 2021; the other $258,000 will be earned equally over the 2022-2023 period. The full $387,000 was included in taxable income in 2021. The company pays $10.900 a year for life insurance on officers. In 2022, the company terminated a top executive and agreed to $117,000 of severance pay. The amount will be paid $39,000 per year for 2022- 2024. The 2022 payment was made. The $117,000 was expensed in 2022. For tax purposes, the severance pay is deductible as it is paid. The enacted tax rates existing at December 31, 2021 are: 2. 3. 2021 2022 20% 25% 2023 2024 30% 30% Determine taxable income for 2021 and 2022. 2021 2022 Taxable income SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Determine the deferred income taxes at the end of 2021. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Deferred income taxes $ Prepare the journal entry to record income taxes for 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Debit Credit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare a schedule of future taxable and (deductible) amounts at the end of 2022. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2023 2024 Total Future taxable (deductible) amounts: Rent S Severance pay Prepare a schedule of the deferred tax (asset) and liability at the end of 2022. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Deferred Tax Future Taxable Temporary Difference (Deductible) Amounts (Asset) Liability Tax Rate Rent % Severance pay Totals SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Compute the net deferred tax expense (benefit) for 2022. (Enter negative amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net deferred tax expense (benefit) for 2022 S SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Prepare the journal entry to record income taxes for 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Account Titles and Explanation Credit Debit SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT Show how the deferred income taxes should be reported on the balance sheet at December 31, 2022. Carla Vista Inc. Balance Sheet (Partial) Click if you would like to Show Work for this question: Open Show WorkStep by Step Solution
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