Deferred taxes

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wk1_deferred_taxes1.xlsx
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DEFERRED TAXES Don't enter anything in, or delete these columns
Section 1 - Calculation of tax expense, taxable payable & deferred tax amounts Points Comments
2013 2014 2015 2016 2017 Total
Income before tax 720,000 800,000 690,000 730,000 720,000
Differences between book and tax income
Depreciation expense Per books 10,000 10,000 10,000 10,000 10,000 50,000
Per tax return 50,000 50,000
Difference (40,000) 10,000 10,000 10,000 10,000 - 0
Interest revenue from Per books 10,000 10,000 10,000 10,000 10,000 50,000
municipal bonds Per tax return - 0 - 0 - 0 - 0 - 0 - 0
Difference 10,000 10,000 10,000 10,000 10,000 50,000
Royalty revenue Per books 25,000 25,000 25,000 25,000 100,000
Per tax return 100,000 100,000
Difference (75,000) 25,000 25,000 25,000 - 0 - 0
(a) Calculate income tax expense 2013 2014 2015 2016 2017
Income Pre Tax 720,000 800,000 690,000 730,000 720,000 15.0
Depreciation Expense 10,000 10,000 10,000 10,000 10,000
Interest Revenue 10,000 10,000 10,000 10,000 10,000
Royalty 25,000 25,000 25,000 25,000 0
Total Income Pre Tax 765,000 845,000 735,000 775,000 740,000
Differeces (105,000) 45,000 45,000 45,000 20,000
Adjusted Pre Tax 660,000 990,000 780,000 820,000 760,000
Tax Rate 40% 40% 40% 40% 40%
Income tax expense 264,000 396,000 312,000 328,000 304,000
(b) Calculate income tax payable 2013 2014 2015 2016 2017
Income Pre Tax 720,000 800,000 690,000 730,000 720,000 15.0
Depreceiation Expense per book 10,000 10,000 10,000 10,000 10,000
per return 50,000 0 0 0 0
Interest Revenue per book 10,000 10,000 10,000 10,000 10,000
per return 0 0 0 0 0
Royalty per book 25,000 25,000 25,000 25,000 0
per return 100,000 0 0 0 0
Taxable Income 915,000 845,000 735,000 775,000 740,000
Tax Rate 40% 40% 40% 40% 40%
Income tax payable 366,000 338,000 294,000 310,000 296,000
(c) Calculate deferred tax amounts 2013 2014 2015 2016 2017
Current
15.0
Tax Rate 40% 40% 40% 40% 40%
Net current tax assets (liabilities)
Non-Current
Net non-current tax assets (liabilities)
Total deferred tax assets (liabilities) - 0 - 0 - 0 - 0 - 0
(d) Prepaire entries to record income tax expense, income tax payable and deferred taxes
2013 Debit Credit
5.0
2014 Debit Credit
5.0
55.0
Section 2 - Presentation in financial statements
(a) Summary Income Statement 2013 2014 2015 2016 2017
Income before taxes 720,000 800,000 690,000 730,000 720,000 10.0
Income tax expense
Current 366,000 338,000 294,000 310,000 296,000
Deferred
Total income tax expense 366,000 338,000 294,000 310,000 296,000
Net income 354,000 462,000 396,000 420,000 424,000
(b) Selected Balance Sheet Items 2013 2014 2015 2016 2017
Assets
Current tax assets 5.0
Non-current tax assets
Liabilities
Current tax liabilities
Non-current tax liabilities
15.0
Section 3 - Valuation allowance
Before closing books for 2013, Company determines $2,000 of deferred tax asset related to depreciation will not be realized
(a) Prepare entry for deferred tax valuation allowance
2013 Debit Credit
5.0
(b) Balance sheet presentation deferred tax asset and valuation
Assets
Non-current tax assets 5.0
Less: valuation allowance
Deferred tax asset (net) - 0
10.0
80.0

Grade

WEEK 1 - DEFERRED TAXES
Criteria Possible Points % Comments Actual Points
Section 1 - Calculation of tax expense, taxable payable & deferred tax amounts 55.0 61% See worksheet for comments 55.0
Section 2 - Presentation in financial statements 15.0 17% 15.0
Section 3 - Valuation allowance 10.0 11% 10.0
CONTENT 80.0 89% 80.0
Utilizes provided layout correctly 10.0 11%
MECHANICS 10.0 11% 0.0
TOTAL ASSIGNMENT 90.0 100% 80.0 89%

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