Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

You are required to make a copy of the tax return that Celia Brown, the previous controller, prepared, and then begin comparing the tax return to the draft of the company's financial statements.

You prepare the following schedule for this year:

 

 

Panache, Inc.
Book/Tax Differences
2009

 

Description


Financial Statement Amount


Tax Return Amount

Depreciation
$48,000

$40,000

Officers' life insurance premiums
$15,000

0

Interest revenue on municipal bonds
$25,000

0

Product warranty costs
$27,000

$20,000

Gross profit on installment sales
$91,000

$80,000


In the tax file, you find the following schedule prepared by Ms. Brown:

 

Panache, Inc.
Deferred Tax Assets & Liabilities
December 31, 2010

 

 

Item Amount


Deferred Account Balance

Deferred Tax Asset

 


Warranties
$49,500

$14,850

Deferred Tax Liabilities

 


Depreciation
$41,800

$12,540

Installment Sales
$15,700

$4,710


The company's current tax rate is 30 percent, and no changes in future tax rates have been enacted.


You are required to:

•Enter the information about book or tax differences in an Excel spreadsheet, and identify which differences are permanent and which are temporary.
•Assuming Panache's operating income as reported on the draft of the income statement is $120,000, compute taxable income and prepare the income tax entry needed in the same Excel spreadsheet. Also, assume the company expects to continue to be profitable and have taxable income indefinitely.

describeing what income tax items will appear on the company's balance sheet for December 31, 2010.

 

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M940137

Have any Question? 


Related Questions in Accounting Basics

To understand the accounting equation and its

To understand the accounting equation and its elements QUESTION Mr. "A" starts a new business. Before to start the business operation, he has purchased vehicle Rs. 1,500,000, office premises Rs. 3,000,000, stock of goods ...

International accounting1 tax jurisdiction and double

INTERNATIONAL ACCOUNTING 1. Tax Jurisdiction and Double Taxation Basis for taxation come from three common bases for taxation...they are source, citizenship, and residence. (Fill in the blanks below) a. The citizenship b ...

What went wrongfriends bank is seeking to hire a new teller

What Went Wrong? Friend's Bank is seeking to hire a new teller. Darrell has applied for the position. His application states that five years ago, he was convicted for embezzlement as a teller. In the interview, Darrell r ...

Problem 1abc stock has a share price of 150 today all

Problem 1 ABC stock has a share price of $150 today. All rates of interest are 3% per annum on a continuously compounded basis. A one-year European call option on one share of stock struck at $147 is worth $15. Finally, ...

Question 1 ldquoaccountancy is an information systemrdquo

Question 1. “Accountancy is an Information System”. Do you agree? Substantiate your answer with reasons. How does an Accountant help in planning and controlling a large commercial organization? Explain.    Question 2. Th ...

Ginos restaurant is a popular restaurant in boston

Gino's Restaurant is a popular restaurant in Boston, Massachusetts. The owner of the restaurant has been trying to better understand costs at the restaurant and has hired a student intern to conduct an activity-based cos ...

The following data relate to the operations of shilow

The following data relate to the operations of Shilow Company, a wholesale distributor of consumer goods: Current assets as of March 31:        Cash $8,000        Accounts receivable $20,000        Inventory $36,000      ...

Accounting for nonfinancial assets will experience some

Accounting for nonfinancial assets will experience some major changes with the convergence to IFRS. One of the key issues will be that of fair value. Research this topic, and give your argument for or against the use of ...

Assignmenthttp990sfoundationcenterorg990pdfarchive5225223451

Assignment http://990s.foundationcenter.org/990_pdf_archive/522/522345144/522345144_201412_990.pdf?_ga=1.64191599.1553211607.1477880190 ( A wider circle NFP) http://awidercircle.org/wp-content/uploads/A-Wider-Circles-201 ...

Question 1the company you work for has a large amount of

Question 1 The company you work for has a large amount of disposable cash and very little debt on its books. The board of directors has expressed an interest in taking this money and investing in equity and debt securiti ...

  • 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

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

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