Doxon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income forfinancial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Incomerecognized for financial reporting purposes in 2021 for lots sold this way was $14 million, which wili be collected over the next threeyears Scheduled collections for 2022-2024 are as follows$4 nillion6 million4 nillion$ 14 million202220232024Pretax accounting income for 2021 was $19 milion. The enacted tax rate is 30%Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journalentry to record income taxes in 2021.2. Suppose a new tax law, revising the tax rate from 30% to 25%, beginning in 2023, is enacted in 2022, when pretax accountingIncome was $16 million. No 2022 lot sales qualified for the special tax treatment. Prepare the appropriate journal entry to recordincome taxes in 20223. If the new tax rate had not been enacted. what would have been the appropriate balance in the deferred tax liability account at theend of 2022?

1) Particulars Current Year - - - Future TaxableAmount Year 2021 2022 2023 2024 Total Pretax…

Answered: Doxon Development began operations in…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 44P

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Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $12 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022 $ 4 million 2023 5 million 2024 3 million $ 12 million Pretax accounting income for 2021 was $16 million. The enacted tax rate is 25%. Required: Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021. Suppose a new tax law, revising the tax rate from 25% to 20%, beginning in 2023, is enacted in 2022, when pretax accounting income was $20 million. No 2022 lot sales qualified for the special…
Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixor recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $13 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022$ 5 million 2023 6 million 2024 2 million $13 million Pretax accounting income for 2021 was $18 million. The enacted tax rate is 30%. Required: 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021. 2. Suppose a new tax law, revising the tax rate from 30% to 25%, beginning in 2023, is enacted in 2022, when pretax accounting income was $14 million. No 2022 lot sales qualified for the special tax treatment. Prepare the…
Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $20 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022 $ 8 million 2023 10 million 2024 2 million $ 20 million Pretax accounting income for 2021 was $29 million. The enacted tax rate is 40%. Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021.2. Suppose a new tax law, revising the tax rate from 40% to 35%, beginning in 2023, is enacted in 2022, when pretax accounting income was $24 million. No 2022 lot sales qualified for the special…
What is the answer and how do you get the answer? Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $15 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022 $ 5 million 2023 7 million 2024 3 million $ 15 million Pretax accounting income for 2021 was $20 million. The enacted tax rate is 30%. Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021.2. Suppose a new tax law, revising the tax rate from 30% to 25%, beginning in 2023, is enacted in 2022, when pretax accounting income was $17…
I need help with required 2 and 3 please. Dixon Development began operations in December 2021. When lots for industrial development are sold, Dixon recognizes income for financial reporting purposes in the year of the sale. For some lots, Dixon recognizes income for tax purposes when collected. Income recognized for financial reporting purposes in 2021 for lots sold this way was $16 million, which will be collected over the next three years. Scheduled collections for 2022–2024 are as follows: 2022 $ 4 million 2023 7 million 2024 5 million $ 16 million Pretax accounting income for 2021 was $28 million. The enacted tax rate is 35%. Required:1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2021.2. Suppose a new tax law, revising the tax rate from 35% to 30%, beginning in 2023, is enacted in 2022, when pretax accounting income was $26 million.…
Tru Developers, Inc., sells plots of land for industrial development. Tru recognizes income for financial reporting purposes in the year it sells the plots. For some of the plots sold this year, Tru took the position that it could recognize the income for tax purposes when the installments are collected. Income that Tru recognized for financial reporting purposes in 2021 for plots in this category was $80 million. The company expected to collect 60% of each sale in 2022 and 40% in 2023. This amount over the next two years is as follows: 2022 $ 48 million 2023 32 million total $ 80 million Tru’s pretax accounting income for 2021 was $120 million. In its income statement, Tru reported interest income of $25 million, unrelated to the land sales, for which the company’s position is that the interest is not taxable. Accordingly, the interest was not reported on the tax return. There are no differences between accounting income and taxable income other than those described…
Case Development began operations in December 2021. When property is sold on an installment basis, Case recognizes installment income for financial reporting purposes in the year of the sale. For tax purposes, installment income is reported by the installment method. 2021 installment income was $870,000 and will be collected over the next three years. Scheduled collections and enacted tax rates for 2022–2024 are as follows: 2022 $ 290,000 20 % 2023 320,000 25 2024 260,000 25 Case also had product warranty costs of $335,000 expensed for financial reporting purposes in 2021. For tax purposes, only the $80,000 of warranty costs actually paid in 2021 was deducted. The remaining $255,000 will be deducted for tax purposes when paid over the next three years as follows: 2022 $ 95,000 2023 84,000 2024 76,000 Pretax accounting income for 2021 was $1,005,000, which includes interest revenue of $25,000 from municipal bonds. The…
Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2024, Isaac had $642 million in sales of this type. Scheduled collections for these sales are as follows: 2024 $71 million 2025 129 million 2026 123 million 2027 157 million 2028 162 million $ 642 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Isaac report in its year - end 2024 balance sheet?
Yebi Corp began operations in December 2024. Yebi builds and sells warehouses under the installment method. When warehouses are sold, Yebi recognizes income for financial reporting purposes. Installment income recognized for financial reporting purposes in 2024 was $28 million, which will be collected over the next three years. Scheduled collections for 2025-2027 are as follows: 2025 2026 2027 $ 8 million 13 million 7 million. $ 28 million Pretax accounting income for 2024 was $38 million. The enacted tax rate is 45%. Required: 1. Assuming no differences between accounting income and taxable income other than those described above, prepare the journal entry to record income taxes in 2024. 2. Suppose a new tax law, revising the tax rate from 45% to 40%, beginning in 2026, is enacted in 2025, when pretax accounting income was $32 million. There were no sales resulting in temporary differences in 2025. Prepare the appropriate journal entry to record income taxes in 2025. 3. If the new tax…
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments.In 2021, Isaac had $600 million in sales of this type. Scheduled collections for these sales are as follows: 2021 $ 60 million 2022 120 million 2023 120 million 2024 150 million 2025 150 million $ 600 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2022, what deferred tax liability would Isaac report in its year-end 2022 balance sheet?
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $676 million in sales of this type. Scheduled collections for these sales are as follows: 2021 $ 83 million 2022 137 million 2023 129 million 2024 162 million 2025 165 million $ 676 million Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2021 balance sheet?
You must calculate the accrual fund, tax and profit for the year for a limited company that started operations on 1 January 2020. The limited company wants to make a maximum provision for accruals for the year 2020. The tax rate for the year 2020 is 21.4%. Assume the following conditions: Reported profit before appropriations and tax SEK 50,000 Non-deductible expenses SEK 5,000 Non-taxable income SEK 15,000 Enter amount (in SEK) for the following items in the income statement for the year 2020: a. Accruals *kr b. Tax cost *kr c. Profit for the yearkr

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