Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Sherrod Inc., reported pretax accounting income of $76 million for 2011. The following information relates to the differences between pretax accounting income and taxable income:
a. Income from installment sales of property included in pretax accounting income for 2011 exceeded that reported for tax purposes by $3 million. The installment receivable account at year end had a balance of $4million (representing portions of 2010 and 2011 installment sales), expected to be collected equally in 2012 and 2013.
b. Sherrod was assessed a penalty of $2 million by the EPA for violation of a federal law in 2011. The fine is to be pad in equal amounts in 2011 and 2012.
c. Sherrod rents its operating facilities but owns one asset acquired in 2010 at a cost of $80 million. Depreciation is reported by the straight line method assuming a 4 year useful life. On the tax return, deductions for deprecation will be more that straight line deprecation the first 2 years but less than the straight line depreciation the next 2 years (in million):

2010 $20 $26 ($6)
2011 $20 $35 ($15)
2012 $20 $12 $8
2013 $20 $7 $13
$80 $80 $0
d. Bad debt expense of $3 million is reported using the allowance method in 2011. For tax purposes the expense is deducted when accounts prove uncollectible (the direct prepare off method); 2 million in 2011. At December 31, 2011, he allowance for uncollectable accounts was $2 million (After adjusting entries). The balance was $1 million at the end of 2010.
e. In 2011, Sherrod accrued an expense and related liability for estimated paid future absences of $7 million relating to the companies new paid vacation program. Future compensation will be deductible on the tax return when actually paid during the next 2 years ($4 million in 2012; $3 million in 2013)
f. During 2010, accounting income included an estimated loss of $2 million from having accrued a loss contingency. The loss is paid in 2011 at which time it is tax deductible.
Balance in the deferred tax asset and deferred tax liability accounts at January 1, 2011, were $1.2 million and $2.8 million, respectfully. The enacted tax rate is 40% each year.

1. Determine the amounts necessary to record income taxes for 2011 and prepare the appropriate journal entry.
2. What is the 2011 net income?
3. Show how any deferred tax amounts should be classified and reported in the 2011 balance sheet.

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M941281

Have any Question? 


Related Questions in Accounting Basics

Problem -firm has consulted with investment bankers and

Problem - Firm has consulted with investment bankers and determined the interest rate it would pay for different capital structures, as shown below. Data for the risk-free rate, the market risk premium, an estimate of fi ...

Discussionpart 1 please respond the following question no

Discussion PART 1 PLEASE RESPOND THE FOLLOWING QUESTION NO LESS THEN 350 WORDS (ORIGINAL WORK, NO PLAGIARISM, 1 Reference "Negative Cash Flow" Please respond to the following: • Assess how the free cash-flow method can b ...

Assignmentpart 1the president of eec recently called a

Assignment Part 1 The President of EEC recently called a meeting to announce that one of the firm's largest suppliers of component parts has approached EEC about a possible purchase of the supplier. The President has req ...

Case study requirementsbullselect an accounting topic of

Case Study Requirements • Select an accounting topic of your choice - this could be revenue recognition, inventory valuation, fair value, stock options, derivatives, investments, segment reporting, leases, just to name a ...

Accounting discussionbulldiscuss the advantages of

Accounting Discussion • Discuss the advantages of understanding accounting as it relates to your current or future position. (Consider careers in management, sales, business operations, finance, and business ownership.)

Assignmenta manufacturing company is thinking of launching

Assignment A manufacturing company is thinking of launching a new product. The company expects to sell $950,000 of the new product in the first year and $1,500,000 each year thereafter. Direct costs including labor and m ...

Accounting paperfor this assignment you will decide what

Accounting paper For this assignment, you will decide what type of budget to implement for a start-up company. Write a three to four page paper in which you: 1. Summarize the type of manufacturing company you plan to sta ...

Write a 700- to 1050-word summary of your teams discussion

Write a 700- to 1,050-word summary of your team's discussion regarding IFRS versus. GAAP. The summary should be structured in a subject-by-subject format. Include an introduction and a conclusion. Your discussion should ...

Comprehensive problem differential apportionmentmortar

Comprehensive Problem: Differential Apportionment Mortar Corporation acquired 80 percent ownership of Granite Company on January 1, 20x7, for $173,000. At that date, the fair value of the non-controlling interest was $43 ...

Construct a time series plot what type of pattern exists in

Construct a time series plot. What type of pattern exists in the data? Quarter Year 1 Year 2 Year 3 1 923 1112 1243 2 1056 1156 1301 3 1124 1124 1254 4 992 1078 1198 Use a multiple regression model with dummy variables a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen