USA Intermediate Accounting - Income Taxes

Joined
Oct 3, 2015
Messages
1
Reaction score
0
Country
United States
Gallo Light warehouses on an installment basis. In those cases, Gallo Light reports income in its income statement in the year of the sale. In its income tax return, though, Gallo, Light reports installment income by the installment method. Installment income in 2015 was $90,000, which Gallo Light expects to collect equally over the next three years. The tax rate is 30%, but based on an enacted law, is scheduled to become 35% in 2017.

Gallo Light's pretax accounting income from the 2015 income statement was $830,000, which includes $40,000 of interest revenue from an investment in municipal bonds. There were no differences between accounting income and taxable income other than those described above.

Required:

  1. Prepare the appropriate journal entry to record Gallo Light's 2015 income taxes. Show calculations.
  2. What is Gallo Light's 2015 net income?
 

Ask a Question

Want to reply to this thread or ask your own question?

You'll need to choose a username for the site, which only take a couple of moments. After that, you can post your question and our members will help you out.

Ask a Question

Top