Aug 15, 2015 · c . $ 180,000. d . $ 450,000. 23 . Which one of the following requires interperiod tax allocation ? a . premium paid on key executives ' life insurance. b . warranty expenses related to a three-year warranty period. c . interest received on municipal obligations. d . percentage depletion in excess of cost depletion.
A . Proceeds from life insurance. Interperiod tax allocation is the distribution of the expenses of income tax between the accounting period. It occurs because of a temporary (timing) difference between the income reported in the financial statements of the company and the absolute taxable income. Proceeds from life insurance are not a part of ...
Aug 21, 2014 · 7. Rein Co. reported deferred tax assets and deferred tax liabilities at the end of 2004 and at the end of 2005. For the year ended 2005, Rein should report deferred income tax expense or benefit equal to the a. Decrease in the deferred tax assets. b. Increase in the deferred tax liabilities. c.
Also known as an interperiod tax allocation, this technique allows a firm to compare the impact of taxation during an accounting period to that of a particular financial reporting period.
An intraperiod tax allocation is the allocation of income taxes to different parts of the results appearing in the income statement of a business, so that some line items are stated net of tax.Feb 14, 2022
Which statement regarding the objectives of financial accounting and the Internal Revenue Code is true? An objective in financial accounting is to provide useful information to decision makers about companies.
Which of the following best summarizes the difference between ASPE and IFRS for income taxes? A. ASPE provides the option to use either the taxes payable method or the future income taxes method, while IFRS does not allow for the use of the taxes payable method.
Income tax expense or benefit is allocated to (1) continuing operations, (2) discontinued operations, (3) other comprehensive income, and (4) items debited or credited directly to shareholders' equity. Operating income is not one of the categories of income subject to intra-period income tax allocation.
When a company discontinues an operation and disposes of the discontinued operation (component), the transaction should be included in the income statement as a gain or loss on disposal reported as: 1. an amount after continuing operations.
The term tax benefit refers to any tax law that helps you reduce your tax liability. Benefits range from deductions and tax credits to exclusions and exemptions.
Income tax payable is a type of account in the current liabilities section of a company's balance sheet. It is compiled of taxes due to the government within one year. The calculation of income tax payable is according to the prevailing tax law in the company's home country.
Simply put, a tax provision is the estimated amount of income tax that a company is legally expected to pay to the IRS for the current year. A tax provision is just one type of provision that corporate finance departments set aside to cover a probable future expense.Sep 2, 2021
ASPE requires an intangible asset with an indefinite life to be tested for impairment whenever events or changes in circumstances indicate that its carrying amount may exceed its fair value. IFRS requires an impairment test for an intangible asset with an indefinite life on an annual basis.
Deferred income tax is a result of the difference in income recognition between tax laws (i.e., the IRS) and accounting methods (i.e., GAAP). Deferred income tax shows up as a liability on the balance sheet.
Companies record income tax expense as a debit and income tax payable as a credit in journal entries. If companies use the same cash method of accounting for both financial and tax reporting, the completed journal entries include an equal debit and credit to income tax expense and income tax payable, respectively.