Fill This Form To Receive Instant Help

Help in Homework
trustpilot ratings
google ratings


Homework answers / question archive / Describe the pros and cons of granting full autonomy to the two divisions

Describe the pros and cons of granting full autonomy to the two divisions

Accounting

Describe the pros and cons of granting full autonomy to the two divisions. & give examples for any 4 decisions.

Southern Atlantic Distributors began operations in January 2021 and purchased a delivery truck for $40,000. Southern Atlantic plans to use straight-line depreciation over a four-year expected useful life for financial reporting purposes. For tax purposes, the deduction is 40% of cost in 2021, 30% in 2022, and 30% in 2023. Pretax accounting income for 2021 was $480,000, which includes interest revenue of $64,000 from municipal governmental bonds. The enacted tax rate is 25%.

Assuming no differences between accounting income and taxable income other than those described above:

Required:
1. Complete the following table given below and prepare the journal entry to record income taxes in 2021.
2. What is Southern Atlantic’s 2021 net income?
  

    Tax Rate %   Tax $ Recorded as:
Pretax accounting income $480,000          
Permanent difference $ 64 incorrect          
Income subject to taxation $480,064 x 25%   $120,016 Income tax expense
Temporary difference $6 incorrect x 25% = $2 Deferred tax liability
Income taxable in current year $480,070 x 25% = $120,018 Income tax payable

Required 1 GJ

No Transaction General Journal Debit Credit
1 1 Income tax expenses    
    Deferred tax liability    
    Income tax payables    

2. Net income =

Purchase A New Answer

Custom new solution created by our subject matter experts

GET A QUOTE

Related Questions