Question :
71. The income before income tax for the first year of : 1234231
71. The income before income tax for the first year of operations is $750,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $550,000. Assuming an income tax rate of 50%, what is the amount of income tax to be reported on the income statement?
A. $50,000
B. $325,000
C. $200,000
D. $375,000
72. The income before income tax for the first year of operations is $750,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $550,000. Assuming an income tax rate of 50%, the amount of the deferred income tax would be
A. $ 200,000
B. $100,000
C. $50,000
D. $375,000
73. The income before income tax for the first year of operations is $600,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $500,000. Assuming an income tax rate of 50%, what is the amount of income tax to be reported on the income statement?
A. $25,000
B. $250,000
C. $300,000
D. $375,000
74. The income before income tax for the first year of operations is $600,000. Because of timing differences in accounting and tax methods, the taxable income for the same year is $500,000. Assuming an income tax rate of 50%, the amount of the deferred income tax would be
A. $ 50,000
B. $100,000
C. $250,000
D. $300,000
75. When there is a difference in the timing of revenues and expenses for accounting versus income tax purposes, it is usually necessary to
A. perform income tax procedures.
B. allocate between various financial statement periods.
C. adjust taxable income.
D. do nothing.
76. ABC Company has incurred a period income tax expense of $500,000. The tax accountants inform the financial accountants that 60% of this value will be paid on March 15th, 2 1/2 months away, while the balance will be paid in 14 1/2 months. The journal entry to recognize these obligations is:
A. Dec 31 Income Tax Expense 300,000
Income Tax Payable 200,000
Cash 500,000
B. Dec 31 Income Tax Expense 500,000
Income Tax Payable – Current 300,000
Income Tax Payable – Non Current 200,000
C. Dec 31 Income Tax Expense 500,000
Cash 500,000
D. Dec 31 Income Tax Payable 500,000
Income Tax Expense 500,000
77. Income tax allocation procedures are justified by what concept?
A. Revenue recognition
B. Matching
C. Conservatism
D. Cash basis accounting
78. Income tax expense represents the amount of income taxes
A. actually payable for this period.
B. applicable to the taxable income this period.
C. applicable to the accounting income this period.
D. computed according to tax law for this period.
79. When income tax expense is larger than the income tax payable for a period it is associated with
A. a larger accounting income than taxable income.
B. a larger taxable income than accounting income.
C. an error.
D. a debit to Deferred Income Tax Payable.
80. The journal entry to recognize the period income tax expense payable at a later date would be:
A. Dec 31 Income Tax Expense 125,000
Income Tax Payable 125,000
B. Dec 31 Income Tax Expense 125,000
Cash 125,000
C. Dec 31 Income Tax Payable 125,000
Income Tax Expense 125,000
D. Dec 31 Income Tax Payable 125,000
Cash 125,000
