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[answered] Book Comprehensive At the beginning of 2013, Norris Company



At the beginning of 2013, Norris Company had a deferred tax liability of $7,300, because of the use of MACRS depreciation for income tax purposes and units-of-production depreciation for financial reporting. The income tax rate is 30% for 2012 and 2013, but in 2012 Congress enacted a 40% tax rate for 2014 and future years.

??????Norris's accounting records show the following pretax items of financial income for 2013: income from continuing operations, $174,000 (revenues of $316,000 and expenses of $142,000); gain on disposal of Division F, $27,800; extraordinary loss, $14,700; loss from operations of discontinued Division F, $8,700; and prior period adjustment, $13,500, due to an error that understated revenue in 2012. All of these items are taxable; however, financial depreciation for 2013 on assets related to continuing operations exceeds tax depreciation by $6,100. Norris had a retained earnings balance of $169,000 on January 1, 2013, and declared and paid cash dividends of $38,000 during 201



Book

 

Comprehensive

 

At the beginning of 2013, Norris Company had a deferred tax liability of $7,300, because of the use of

 

MACRS depreciation for income tax purposes and units-of-production depreciation for financial

 

reporting. The income tax rate is 30% for 2012 and 2013, but in 2012 Congress enacted a 40% tax

 

rate for 2014 and future years.

 

Norris's accounting records show the following pretax items of financial income for 2013: income

 

from continuing operations, $174,000 (revenues of $316,000 and expenses of $142,000); gain on

 

disposal of Division F, $27,800; extraordinary loss, $14,700; loss from operations of discontinued

 

Division F, $8,700; and prior period adjustment, $13,500, due to an error that understated revenue in

 

2012. All of these items are taxable; however, financial depreciation for 2013 on assets related to

 

continuing operations exceeds tax depreciation by $6,100. Norris had a retained earnings balance of

 

$169,000 on January 1, 2013, and declared and paid cash dividends of $38,000 during 2013.

 

Required: Hide 1. Prepare Norris's income tax journal entry at the end of 2013.

 

If an amount box does not require, leave it blank. De

 

c.

 

31 Show All Feedback Hide 2. Prepare Norris's 2013 income statement. NORRIS

 

COMPANY

 

Income

 

Statement

 

For Year Ended December 31,

 

2013

 

$

 

316000 142000 $

 

174000 $ Results from discontinued

 

operations:

 

$ $ $ Show All Feedback Hide 3. Prepare Norri's 2013 statement of retained earnings. NORRIS

 

COMPANY

 

Statement of Retained

 

Earnings

 

For Year Ended December 31,

 

2013

 

Retained earnings, January 1, 2013 Adjusted retained earnings, January 1,

 

2013 $

 

169000 $ $ 38000 Retained earnings, December 31,

 

2013 $ Hide Feedback

 

Partially Correct Hide 4. Show the related income tax disclosures on Norris's December 31, 2013, balance sheet. NORRIS

 

COMPANY

 

Partial Balance

 

Sheet

 

December 31,

 

2013

 

Current Liabilities

 

$ Noncurrent

 

Liabilities

 

$

 


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