a)
DTL | |
Opening balance as at Dec 31, 2019 | 52,500 |
Increase in DTL due to Plant assets | 27,300 |
Increase in DTL due to Warranties expense | 12,600 |
Closing Balance | 92,400 |
b)
Current Assets | |
DTA | 8,400 |
Less: Valuation allowance | -21,000 |
DTA | -12,600 |
c)
Current Liabilities | |
DTL | 92400 |
Current Assets | |
DTA | 8,400 |
Less: Valuation allowance | -21,000 |
DTA |
-12,600 |
d)
Income tax expense | |
Current Tax | 1,21,800 |
Deferred Tax Asset | 75,600 |
Deferred Tax Liability | 39,900 |
Total Income tax expense for the year | 2,37,300 |
e)
Computation of Current tax | ||
Income before income taxes | 4,20,000 | |
Add: | ||
Excess depreciation added back | 1,30,000 | 27300/21% |
Warranty expenses | 60,000 | |
Less: | ||
Bond interest | -30,000 | |
Taxable Income | 5,80,000 | |
Rate | 21% | |
Current Tax | 1,21,800 |
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At December 31, 2019. Acme Inc. had the following deferred tax balances: Deferred tax liability Deferred...
Assignment 5
USE GAAP CODIFICATIONS
At December 31, 2017, Acme Inc. had the following deferred tax
balances:
Deferred tax
liability
$ 62,500
Deferred tax
asset
100,000
Valuation
allowance
40,000
These deferred tax balances relate to two items. First, Acme has
recorded excess tax deductions related to its plant assets. At
December 31, 2017, plant assets had a book value of $1,000,000 and
a tax basis of $750,000. Second, Acme had a NOL carryforward in the...
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