Crane Inc's only temporary difference at the beginning and end of 2024 is caused by a $3.72 million deferred gain for tax purposes foran installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equalinstallments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $1.116,000. In the third quarter of2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $6,200,000,and taxable income is expected in all future years.(a)Determine the amount reported as a deferred tax liability at the end of 2024.Deferred tax liability

A deferred tax liability is created when a tax obligation is accumulated in one financial year but…

Answered: Crane Inc's only temporary difference

Business

Accounting

Crane Inc's only temporary difference

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Crane Inc's only temporary difference at the beginning and end of 2024 is caused by a $3.72 million deferred gain for tax purposes for
an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal
installments in 2025 and 2026. The related deferred tax liability at the beginning of the year is $1.116,000. In the third quarter of
2024, a new tax rate of 20% is enacted into law and is scheduled to become effective for 2026. Taxable income for 2024 is $6,200,000,
and taxable income is expected in all future years.
(a)
Determine the amount reported as a deferred tax liability at the end of 2024.
Deferred tax liability

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