Need help with Accounting Pros Only Please

Nov 25th, 2015
Price: $20 USD

Question description

If you're not an accounting expert, please don't reply. Someone sent me the wrong answer earlier. 

Colorado Company has provided you the following information.

Year  Taxable income  Income tax rate

2014  $390,000  35% 

2015  $320,000  37%

2016  $400,000  40%

2017  ($1,200,000)  40%

Colorado Company has decided to use the loss carryback and carryforward provision as a result of the year 2017 loss. The enacted tax rate remains at 40% after year 2017. Colorado Company has determined that a valuation allowance is not necessary.

Prepare the journal entry on December 31, 2017 to record the carryback and carryforward decision.

Part B (30 points)

The Matrix Company began operations as of the beginningof 2015. During  2015, Matrix reported GAAP (book) income before taxes of $789,500. For income tax purposes, depreciation expense was $150,000; for GAAP (book) purposes, depreciation expense was $74,000. Matrix accrued $900,000 of revenue for GAAP (book) purposes during 2015; $600,000 of the accrued revenue was taxable during 2015. Matrix earned interest of $79,800 from a municipal bond investment during 2015. Matrix’s marginal income tax rate is 40%. Matrix did not make any income tax payments during 2015.

a.  Determine Matrix’s taxable income for the year ended December 31, 2015.

b.  Prepare the 2015 year-end journal entry to record income tax expense.

Tutor Answer

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School: Rice University

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