1. Chapter 14, Section 6

2.  Corporations anticipating annual federal income taxes of $500.00 or more are required to pay their estimated taxes each quarter.  The amount already paid shows in the Trial Balance column for Federal Income Tax Expense  At the end of the fiscal period, the business must calculate actual federal income tax expense

3.  In order to calculate actual federal income tax, you must first determine the net income before federal income tax expense  To calculate:  Complete all other adjustments on work sheet  Extend all amounts except Federal Income Tax Expense to the Income Statement or Balance Sheet columns  On a separate sheet of paper, total the work sheet’s Income Statement columns  Calculate the difference between Income Statement Debit column and Income Statement Credit column ▪ This is the net income before federal income tax expense

4. Use the Net Income before Federal Income Tax and the tax table to calculate Federal Income Tax Expense Total of Income Statement Credit column$500,253.10 Less total of Income Statement Debit column before federal income tax–396,049.91 Equals Net Income before Federal Income Tax$104,203.19

6.  To calculate adjustment amount  Subtract actual federal income tax from what has been paid already (amount in Trial Balance column)  $23,889.24 – 18,000 = $5,889.24  Debit Federal Income Tax Expense Credit Federal Income Tax Payable

7. 1. Calculate the amount of federal income tax expense adjustment. 2 3 3 1 1 2. Total and rule the Adjustments columns. 3. Extend account balances.

8. 11 2 4 3 5 1.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.

10.  Work Together 14-6 (text pg. 436)  On Your Own 14-6 (text pg. 436)  Application 14-6 (text pg. 439)  Mastery 14-7 (text pg. 439-440)