Need Help 21 The following information is taken from Glenville Corporation\'s 20
ID: 2504726 • Letter: N
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21 The following information is taken from Glenville Corporation's 2014 financial records: Pretax accounting income ........................... $1,500,000 Excess tax depreciation ............................ (45,000) Taxable income ..................................... $1,455,000 Assume the taxable temporary difference was created entirely in 2014 and will reverse in equal net taxable amounts in each of the next three years. If tax rates are 40 percent in 2014, 35 percent in 2015, 35 percent in 2016, and 30 percent in 2017, then the total deferred tax liability Glenville should report on its December 31, 2014, balance sheet is
A $15,750
B $15,000
C $13,500
D $18,000
22 Analysis of the assets and liabilities of Baxter Corp. on December 31, 2014, disclosed assets with a tax basis of $1,000,000 and a book basis of $1,300,000. There was no difference in the liability basis. The difference in asset basis arose from temporary differences that would reverse in the following years: 2015 ............................ $80,000 2016 ............................ 70,000 2017 ............................ 72,000 2018 ............................ 40,000 2019 ............................ 38,000 The enacted tax rates are 30 percent for the years 2014-2017 and 35 percent for 2018-2019. The total deferred tax liability on December 31, 2014, should be
A $93,900
B $90,000
C $105,000
D $69,000
23. Ballantine Products, Inc., reported an excess of warranty expense over warranty deductions of $72,000 for the year ended December 31, 2014. This temporary difference will reverse in equal amounts over the years 2015 to 2017. The enacted tax rates are as follows: 2014 ............................ 40% 2015 ............................ 35% 2016 ............................ 30% 2017 ............................ 25% The reporting for this temporary difference at December 31, 2014, would be
A deferred tax liability of $23,400.
B current deferred tax liability of $7,200 and a noncurrent deferred tax liability of $16,200
C current deferred tax asset of $7,200 and a noncurrent deferred tax asset of $16,200.
D deferred tax asset of $23,400.
24 The books of the Speedster Company for the year ended December 31, 2014, showed pretax income of $295,000. In computing the taxable income for federal income tax purposes, the following timing differences were taken into account: Depreciation deducted for tax purposes in excess of depreciation recorded on the books ................... $14,500 Income from installment sale reportable for tax purposes in excess of income recognized on the books .......... 11,500 What should Speedster record as its current federal income tax liability at December 31, 2014, assuming a corporate income tax rate of 30 percent?
A $80,700
B $87,600
C $89,400
D $84,700
25 Bodner Corporation's income statement for the year ended December 31, 2014, shows pretax income of $1,000,000. The following items are treated differently on the tax return and in the accounting records: Tax Accounting Return Records Rent income ........................... $ 70,000 $120,000 Depreciation expense .................. 280,000 220,000 Premiums on officers' life insurance .. -- 90,000 Assume that Bodner's tax rate for 2014 is 30 percent. What is the amount of income tax payable for 2014?
A $360,000
B $294,000
C $320,000
D $267,000
Explanation / Answer
21. A $15,750
22.C $105,000
23. B current deferred tax liability of $7,200 and a noncurrent deferred tax liability of $16,200
24. A $80,700
25. C $320,000
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