Differences between pretax accounting income and taxable income for Ayers Services were as follows during 2022: ($ in millions)Pretax accounting income $450 Permanent difference (39) 411 Temporary difference (31) Taxable income $380 The cumulative temporary difference as of the end of 2022 is $100 million (also the future taxable amount). The enacted tax rate is 25%. What is the deferred tax asset or liability to be reported in the balance sheet?

Deferred tax liability is a balance sheet item that represents the amount of income tax that a…

Answered: Differences between pretax accounting…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

Differences between pretax accounting income and taxable income for Ayers Services were as follows during 2022:

	($ in millions)
Pretax accounting income		$	450
Permanent difference			(39	)
			411
Temporary difference			(31	)
Taxable income		$	380

The cumulative temporary difference as of the end of 2022 is $100 million (also the future taxable amount). The enacted tax rate is 25%. What is the deferred tax asset or liability to be reported in the balance sheet?

Expert Solution

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions