Ask Experts Questions for FREE Help !
Ask
    mlavigne01's Avatar
    mlavigne01 Posts: 3, Reputation: 1
    New Member
    		  
    #1

    Feb 19, 2009, 03:38 PM
    Income Tax Expense
    How would I determine Income tax Expense. Rate is 34%

    The different transactions that occurred were:
    1. Sales revenues of $300,000, of which $200,000 was on credit; cost, provided by perpetual inventory record, $172,500. Hint: when perpetual system is used, two entries are made to record a sale – first, debit cash and/or accounts receivable and credit sales revenue; second debit cost of goods sold and credit inventory.
    2. Collected $172,500 on account receivable
    3. Purchased merchandise, $327,500, of which $237,500 was on credit.
    4. Paid accounts payable $178,300
    5. Paid operating expenses $35,930
    6. Paid wages $72,500. At year end wages payable total 17,300.

    And the numerous items are as follows.


    Cash 150,000
    Accounts Receivable 25,000
    Allowance for doubtful accounts 1,250
    Inventory (perpetual inventory system)* 65,000
    Prepaid insurance (15 months remaining) 6,000
    Property, Plant and Equipment (PP&E) 100,000
    Accumulated Depreciation on PPE 75,000
    Accounts Payable 38,500
    Wages Payable 13,500
    Common Stock, par $1
    Retained Earnings 82,750

    Total=
    345,000
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
    Ultra Member
    		  
    #2

    Feb 19, 2009, 05:28 PM

    You need to do an Income statement to get Income from Operations, then take that amount * your Income tax rate to get your Income Tax Expense.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Prepaid expense and income [ 1 Answers ]

If an insurance policy for 2 years was entirely expense in one year. How do I correct this error? Ex: if policy for 2 years is 12,000 and it all expense in one year, the income would be understated by 6,000?:confused: The correct entry would be: Insurance expense 6,000 Prepaid...

Expense Credit or Income? [ 1 Answers ]

We are a not for profit dog club/rescue. We receive most of our income in donations. We received an amount of money from another rescue to pay vet bills.for dogs rescued from a puppy mill. Do I show this money as donation income or credit vet expenses in my expense accounts?

Income Tax expense [ 1 Answers ]

I am having trouble understanding the material here. How can I calculate income tax expense for the year ending 2005. Here is the income statement I am working on: KROGER CO 10-K/A 2005-01-29: ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Any Suggestions would help. Thanks

Income Tax Expense [ 1 Answers ]

A Company reported $350,000 in income before income tax for financial reporting (book) purposes in Year 3, its first year of operation. The tax depreciatin exceeded its book depreciation by $30,000. The tax rate for Year 3 and all future years is 40%. Income tax expense reported on the company...

View more questions Search