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The following are two independent situations related to future taxable and deductible amounts that resulted from temporary differences at December 31, 2023. In both
The following are two independent situations related to future taxable and deductible amounts that resulted from temporary differences at December 31, 2023. In both situations, the future taxable amounts relate to property, plant, and equipment depreciation, and the future deductible amounts relate to settlements of litigation that were previously accrued in the accounts. 1. Carla Vista Corp. has developed the following schedule of future taxable and deductible amounts: List of Accounts Allowance to Reduce Deferred Tax Asset to Expected Realiz Allowance to Reduce Future Tax Asset to Expected Realizab 2024 2025 2026 2027 2028 Taxable amounts $600 $600 $600 $400 $200 Deductible amounts 0 0 0 (4,000) 0 Carla Vista reported a net deferred tax liability of $1,040 at January 1, 2023. 2. Sandhill Corp. has the following schedule of future taxable and deductible amounts: 2024 2025 2026 2027 Taxable amounts $800 $800 $800 $800 Deductible amounts 0 0 (6,400) 0 Sandhill reported a net deferred tax asset of $1,480 at January 1, 2023. Both Carla Vista and Sandhill have taxable income of $7,600 in 2023 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2023 are 25% for 2023 to 2026, and 30% for 2027 and subsequent years. All of the underlying temporary differences relate to non-current assets and liabilities. Both Sandhill and Carla Vista report under IFRS. (a) Your answer is correct. Determine the deferred tax assets or liabilities that will be reported on each company's December 31, 2023 SFP. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Current Tax Benefit Current Tax Benefit - Discontinued Operations Current Tax Expense Current Tax Expense - Discontinued Operations Current Tax Payable Deferred Tax Asset Deferred Tax Benefit Deferred Tax Benefit - Discontinued Operations Deferred Tax Benefit-OCI Deferred Tax Expense Deferred Tax Expense - Discontinued Operations Deferred Tax Expense-OCI Deferred Tax Liability FV-NI Investments FV-OCI Investments Future Tax Asset Carla Vista Corp. Deferred tax asset / (liability) $ 570 Debit $ Sandhill Corp. 760 Debit Future Tax Benefit Future Tax Expense Future Tax Liability For each of these two situations, prepare journal entries to record income taxes for 2023. (List all debit entries before credit entries. Credit account titles are automatically indented when the 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.) Income Tax Payable Income Tax Receivable Investment Income or Loss Carla Vista Corp. Date Account Titles and Explanation Debit December 31, 2023 Current Tax Expense Income Tax Payable (To record current tax expense) December Deferred Tax Asset 31, 2023 Deferred Tax Liability Income Tax Payable (To record deferred tax expense) Date Account Titles and Explanation December 31, 2023 Current Tax Expense Income Tax Payable (To record current tax expense) December 31, 2023 Deferred Tax Liability Income Tax Payable (To record deferred tax expense) Sandhill Corp. Debit 1900 630 1900 720 Credit Credit Land No Entry Retained Earnings 1900 Unrealized Gain or Loss 270 60 1900 720 Unrealized Gain or Loss-OCI
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