Kế toán, kiểm toán - Chapter 18: Appendix a: Income taxes

CHAPTER 18APPENDIX A:INCOME TAXES2CHAPTER 18: Income TaxesAfter studying Appendix 18A, you should be able to:12. Apply the temporary difference approach (future income taxes method) of accounting for income taxes in a comprehensive situation.3Comprehensive IllustrationAllteak Corporation began operations in 2017In 2017, 10 contracts were completed allowing customer payment on an instalment basis $112,000 of gross profit was reported on the 2017 tax return and $560,000 was recognized for financial reporting purposes Future collections will result in taxable amounts of $112,000 in each of the next 4 years4Comprehensive IllustrationThe depreciation and net asset values for depreciable assets are shown below:5Comprehensive IllustrationIn 2017, warranty liability accrued was $200,000 and actual expenditures were $44,000 At year end, the company accrued non-taxable dividends receivable of $28,000 During 2017, non-deductible fines and penalties of $26,000 were paidThe 2017 accounting income before taxes is $412,000The enacted tax rate for 2017 is 30%, and for 2018 and future years it is 20%6Calculation of Taxable Income and Taxes Payable—20177Determination of Deferred Tax Assets, Liabilities, and Deferred Tax Expense—20178Schedule of Reversals of Temporary Differences at December 31, 20179Income Tax Accounting Entries—2017Current Tax Expense 46,200 Income Tax Payable 46,200Deferred Tax Expense 51,200 Deferred Tax Liability 51,20010Financial Statement Presentation—201711