Question

Problem 3. Questions 6 through 10 use the below fact pattern. Problem 3, Question 7. Company C had the following investment. Help them determine the financial statement implications of the investment. Tax rate 21% Estimated tax payment 21,000 Investment cost and ending fair values for 20X1 and 20X2: 20X1 20x2 Cost 100,000 100,000 Fair value 110,000 134,000 Total gain 10,000 34,000 20X1 income statement information: Sales 1,670,200 Expenses 1,536,600 7) What is the taxes payable for 20X1 assuming the investment is short-term?

Also, what is deferred taxes payable for 20X1 assuming it's short-term?

Answer 1

souh, Now , it is given given that that investment is investment investment is short-term hoa If gains are taxed same as ordinary income if they For taxes, we need to calculate COL total income. tolmu Income - Operating investment income e income Tax Rate :- 21 y. For 20x1 - (sales - Expenses) + ($10,000) $167 D200 - $1536,600 + $10.000. - 1 $143, 600) en Total income Taxes ; - est a thcome x Tax rate) 14 3,600 x 0.21 $30, 156 s : Tax in 50 Now, total taxes o de payable is $30, 156 But they estimated tut payment to be $21,000 company o has reserved 21,000 for futures tax payment o p so net tax - 30156-121,000 fra store deferred payable - $ 915%.