The following information has been obtained for the gocker corporation

CHAPTER 19

1.Oxford Corporation began operations in 2012 and reported pretax financial income of $227,110 for the year. Oxford’s tax depreciation exceeded its book depreciation by $39,100. Oxford’s tax rate for 2012 and years thereafter is 30%. In its December 31, 2012, balance sheet, what amount of deferred tax liability should be reported?

Deferred tax liability to be reported

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Excess depreciation on tax return

$39,100

Tax rate

x 30

%

Deferred tax liability

$11,730

2. At December 31, 2012, Percheron Inc. had a deferred tax asset of $36,670. At December 31, 2013, the deferred tax asset is $61,870. The corporation’s 2013 current tax expense is $61,730. What amount should Percheron report as total 2013 tax expense?

Total income tax expense for 2013

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Deferred tax asset, 12/31/13

$61,870

Deferred tax asset, 12/31/12

36,670

Deferred tax benefit for 2013

(25,200

)

Current tax expense for 2013

61,730

Total income tax expense for 2013

$36,530

3. Conlin Corporation had the following tax information.

Year

Taxable Income

Tax Rate

Taxes Paid

2010

$308,100

40%

$123,240

2011

$334,000

35%

$116,900

2012

$407,000

35%

$142,450

In 2013, Conlin suffered a net operating loss of $478,400, which it elected to carry back. The 2013 enacted tax rate is 34%. Prepare Conlin’s entry to record the effect of the loss carryback. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

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Benefit Due to Loss Carryback = $116,900 + [($478,400 – $334,000) x 35%] = $167,440

4.

Starfleet Corporation has one temporary difference at the end of 2012 that will reverse and cause taxable amounts of $57,100 in 2013, $63,520 in 2014, and $80,780 in 2015. Starfleet’s pretax financial income for 2012 is $445,620, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2012.

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(a) and (b)

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(a) Compute taxable income and income taxes payable for 2012.

Taxable income

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Income taxes payable

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(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2012. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation

Debit

Credit

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(a)

Pretax financial income for 2012

$445,620

Temporary difference resulting in future taxable

amounts in 2013