AC 302 Chapter 19 Problem Question 1

AC 302 Chapter 19 Problem Question 1
Name				Date		
Instructor				Course		
Intermediate Accounting 14th Edition by Rockies Wetland and Garfield						
Primer on Using Excel in Accounting by Rex A Schoolhouse						
						
P19-1 (Three Differences, No Beginning Deferred Taxes, Multiple Rates) The following information is available for Remmers Corporation for 2012.						
						
1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by						
$120,000 	This difference will reverse in equal amounts of				$30,000 	over the years
2013-2016.						
2. Interest received on municipal bonds was			$10,000 			
3. Rent collected in advance on January 1, 2012, totaled				$60,000 	for a 3-year period. Of  this 	
amount,	$40,000 	was reported as unearned at December 31, for book purposes.				
4. The tax rates are		40%	for 2012 and	35%	for 2013 and subsequent years.	
5. Income taxes of		$320,000 	are due per the tax return for 2012.			
6. No deferred taxes existed at the beginning of 2012.						
						
Instructions:						
(a) Compute taxable income for 2012.						
						
	Use this area for calculations					
	Use this area for calculations					
	Use this area for calculations					
	Use this area for calculations					
						
(b) Compute pretax financial income for 2012.						
						
	Taxable income from part (a)			Amount		
	Title			Amount		
	Title			Amount		
	Title			Amount		
	Pretax financial income for 2012			Formula		
						
(c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes						
     payable for 2012 and 2013. Assume taxable income was					$980,000 	in 2013.
						
2012	Account Title				Formula	
	Account Title				Amount	
	Account Title					Amount
	Account Title					Amount
						
2013	Account Title				Formula	
	Account Title				Formula	
	Account Title					Formula
	Account Title					Formula
						
"(d) Prepare the income tax expense section of the income statement for 2012, beginning with ""Income
     before income taxes."""						
						
						
	Income before income taxes				Amount	
	Income tax expense					
	Title			Amount		
	Title			Amount	Formula	
	Net income				Formula