11/29/23, 8:38 AM
Question 10 of 100 - Quiz Two
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For calendar 2023, Novak Corp. reported depreciation expense of $797000 on its income statement, but on its 2023 income tax return,
Novak claimed CCA of $1197000. The 2023 income statement also included $147000 in accrued warranty expense that will be
deducted for tax purposes when paid. Novak's income tax rates are 30% for 2023 and 2024, and 24% for 2025 and 2026. The
depreciation difference and warranty expense will reverse over the next three years as follows:
Depreciation
Difference
Warranty Expense
2024
$160000
$29400
2025
140000
49000
2026
100000
68600
$400000
$147000
These were Novak's only reversible differences. At December 31, 2023, Novak’s deferred tax liability should be
$68556.
$73594.
$134956.
$73500.
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