1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 14-6 Calculating Federal Income Tax and Completing a Work Sheet

2. CENTURY 21 ACCOUNTING © Thomson/South-Western 2 LESSON 14-6 Federal Income Tax – Steps Calculating 1.Complete all other adjustments on the work sheet. 2.Extend all amounts except Federal Income Tax Expense & Payable to the Income Statement or Balance Sheet columns. 3.On a separate section, total the work sheet’s Income Statement columns. 4.Calculate the difference between the Income Statement debit column and the credit column. 1.The difference between the totals is the net income or net loss before federal income tax expense.

3. CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 14-6 FEDERAL INCOME TAX EXPENSE ADJUSTMENT page 427 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 On the worksheet: Debit - Federal Income Tax Expense Credit - Federal Income Tax Payable

4. CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 14-6 CALCULATING FEDERAL INCOME TAX page 428

5. CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 14-6 1. Calculate the amount of federal income tax expense adjustment. RECORDING THE FEDERAL INCOME TAX ADJUSTMENT 2 3 3 1 1 page 429 2. Total and rule the Adjustments columns. 3. Extend account balances.

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 14-6 COMPLETING A WORK SHEET 11 page 430 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.

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 14-6 A COMPLETED 8-COLUMN WORK SHEET page 432

8. CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 14-6 A 10-COLUMN WORK SHEET page 434-435 1.Trial balance 4 6 23 5 5.Extend balances 2.Adjustments 3.Extend adjusted balances 4.Total, prove, and rule 6.Calculate net income; total, prove and rule 1