CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning LESSON 14-6 Calculating Federal Income Tax and Completing a Work Sheet Federal income tax expense adjustment Calculating federal income tax Recording the federal income tax adjustment Completing a work sheet A completed 8-column work sheet A 10- column work sheet
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning Competency: Understanding the Accounting Cycle for a Merchandising Business 2 LESSON 14-6 Objectives: 65 Generate trial balance and end of period adjustments for a merchandising business 71 Summarize the progression from source documents to journals to ledgers to financial reports for a merchandising business
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 3 LESSON 14-6 FEDERAL INCOME TAX EXPENSE ADJUSTMENT page 427 Total of Income Statement Credit column$500, Less total of Income Statement Debit column before federal income tax–396, Equals Net Income before Federal Income Tax$104,203.19
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 4 LESSON 14-6 CALCULATING FEDERAL INCOME TAX page 428
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 5 LESSON Calculate the amount of federal income tax expense adjustment. RECORDING THE FEDERAL INCOME TAX ADJUSTMENT page Total and rule the Adjustments columns. 3. Extend account balances.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 6 LESSON 14-6 COMPLETING A WORK SHEET 11 page Total the Income Statement and Balance Sheet columns. 5.Rule double lines. 4.Calculate the column totals. 3.Extend the net income amount. 2.Calculate and enter the net income after federal income tax.
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 7 LESSON 14-6 A COMPLETED 8-COLUMN WORK SHEET page 432
CENTURY 21 ACCOUNTING © 2009 South-Western, Cengage Learning 8 LESSON 14-6 A 10-COLUMN WORK SHEET page Trial balance Extend balances 2.Adjustments 3.Extend adjusted balances 4.Total, prove, and rule 6.Calculate net income; total, prove and rule 1