Rollerblades Return Co. purchased a short-term investment on January 1, 20X1 as shown below. Cost of...
Rollerblades Return Co. purchased a short-term investment on January 1, 20X1 as shown below.
| Cost of the short-term investment | 325,000 |
| Fair value of the short-term investment at year-end | 395,000 |
| Tax rate | 30% |
| Sales | 1,370,000 |
| Operating expenses | 1,170,000 |
| Estimated tax payment | 32,000 |
What is deferred taxes payable-short-term investment at December 31, 20X1?
Homework Answers
Notional Gain on Fair valuation of Short term investments = 395,000-325,000 = 70,000
Deferred tax Liabilities (Deferred Tax payable) for Short term investment = 70,000 X 30% = 21,000
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