D. An entity reported the following information during the first year of operations: Pretax financial income 9,000,000 Nontaxable interest received 1,000,000 Nondeductible life insurance premiums paid 500,000 Long-term loss accrual in excess of deductible amount 1,500,000 Tax depreciation in excess of financial depreciation 2,000,000 Income tax rate 25% 1. What is the current tax expense? 2. What is the total tax expense? 3. What is the deferred tax liability at year-end? 4. What is the deferred tax asset at year-end?
Depreciation Methods
The word "depreciation" is defined as an accounting method wherein the cost of tangible assets is spread over its useful life and it usually denotes how much of the assets value has been used up. The depreciation is usually considered as an operating expense. The main reason behind depreciation includes wear and tear of the assets, obsolescence etc.
Depreciation Accounting
In terms of accounting, with the passage of time the value of a fixed asset (like machinery, plants, furniture etc.) goes down over a specific period of time is known as depreciation. Now, the question comes in your mind, why the value of the fixed asset reduces over time.
D. An entity reported the following information during the first year of operations:
Pretax financial income 9,000,000
Nontaxable interest received 1,000,000
Nondeductible life insurance premiums paid 500,000
Long-term loss accrual in excess of deductible amount 1,500,000
Tax
Income tax rate 25%
1. What is the current tax expense?
2. What is the total tax expense?
3. What is the
4. What is the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
