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acc423_wk_4_team_assignment_p19-4....xlsx

P19-4

Name				Problem 19-4
Date	23-Apr-16			Shinault Inc.
Solution (a)
	SCHEDULE							Points Earned	Points Available
	Computation of Pretax Financial Income and Taxable Income								17.5
	December 31, 2014
1	Pretax financial income					1
2	Permanent differences:					2
3	Insurance Expense					3
4	Bond Interest					4
5	Pollution Fines					5
6					$ - 0	6
7						7
8	Temporary differences:					8
9	Depreciation Expense					9 ---------->	Book Depreciation
10	Installment Sales					10	Tax Depreciation
11	Warranty Expense					11	Excess Tax Depreciation		$ - 0
12	Taxable Income				$ - 0	12
13						13
14						14
15	Income tax payable for 2014 computation:					15
16	Taxable Income				$ - 0	16
17	Tax Rate				30%	17
18	Income Tax Payable				$ - 0	18
19						19
20	Deferred income taxes for 2014 computation:					20
21	Depreciation Expense (deferred liability)				$ - 0	21
22	Installment Sales		(deferred liability)		$ - 0	22
23	Warranty Expense		(deferred asset)		$ - 0	23
Solution (b)
		Account Titles		Debit	Credit
1		Income Tax Expense		$ 227,760		1
2		Deferred Tax Asset		$ - 0		2
3		Deferred Tax Liability			$ - 0	3
4		Income Tax Payable			$ - 0	4
5						5