Elixir inc purchased equipement in 2018 for $50,000 with no residual value. On December 31, 2020 accumulated depreciation using the straight-line method for financial reporting was 15,000. for tax purposes elixir uses MACRS depreciation resulting in $35,600 in accumulated depreciation for tax purposes onDecember 31, 2020. taxable income was $100,000 for 2020 and the companies tax rate was 25%. determine the GAAP basis of equipment on December 30, 2020. determine the tax basis of equipment on December 30 2020. Assuming a different tax liability balance of 4900 on December 31, 2019 report income tax expense for 2020.

Q: On January 1, Simon Coro. purchased a delivery truck for $60,000. The truck's salvage value is…

A: Depreciation expense is the non-cash expense charged on the non-current assets. It is reported on…

Q: Ayres Services acquired an asset for $184 million in 2024. The asset is depreciated for financial…

A: Answer:- Temporary disparities that arise between pretax and taxable income result in either a…

Q: Swifty Corporation's pre-tax accounting income of $748,000 for the year 2023 included the following…

A: Detailed explanation: Swifty's normalized earnings for 2023 were calculated by making adjustments to…

Q: A company acquired an asset for $1,200,000 in 2024. The asset is depreciated for financial reporting…

A: The deferred tax liability is created when the taxes to be paid as per income tax are greater than…

Q: In its first three years of operations, Vaden Corp. experienced the following income/(losses):…

A: Amount of loss carryforward will result in creation of deferred tax liability in books as loss will…

Q: Wynn Farms reported a net operating loss of $190,000 for financial reporting and tax purposes in…

A: A journal entry is a record of the business transactions in the accounting books of a business.…

Q: Bridgeport Corp. purchased depreciable assets costing $24,000 on January 2, 2023. For tax purposes,…

A: Depreciation is an accounting technique which is used to reduce the book value of the assets over a…

Q: For the quarter ended September 30, 2021, how much should GREEN report as net income?

A: Financial statements are those statements which are prepared at the end of accounting period. The…

Q: Ayres Services acquired an asset for $200 million in 2021. The asset is depreciated for financial…

A: Differed Tax Liability: It is created when there are temporary differences book tax and actual…

Q: On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of…

A: The amount of tax that has not yet been paid but will be paid in the future is known as the deferred…

Q: Ayres Services acquired an asset for $48 million in 2024. The asset is depreciated for financial…

A: Deferred Tax Liability -Taxes that become due in one accounting period but are not paid in that…

Q: Required: Determine (a) the temporary book-tax difference for the depreciable asset and (b) the…

A: Deferred Tax Liability ;-A deferred tax liability refers to an accounting concept that arises due to…

Q: ABC COMPANY Income Statement shows $ 297,500 profit for the year 2019. The following information are…

A: if expenses in income statements are undervalued then income will be overbooked so add the portion…

Q: On January 1, 2021, Ameen Company purchased major pieces of manufacturing equipment for a total of…

A: The deferred tax liability decreases the current liability for the tax, which means deferred tax…

Q: At the beginning of 2021, Crane Co. purchased an asset for $1200000 with an estimated useful life of…

A: The correct answer is  $978000$720000

Q: amount should Munoz report as its current income tax liability on its December 31, 2022 statement of…

A: Income tax liability refers to the amount which is required to pay to the authorities of taxation.…

Q: Wynn Farms reported a net operating loss of $168,000 for financial reporting and tax purposes in…

A: When revenues is less than expenses or costs , a net operating loss is recognized. According to IRS…

Q: Ayres Services acquired an asset for $64 million in 2021. The asset is depreciated for financial…

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

Q: Shimei Inc. purchased computer equipment on March 1, 2020, for $31,000. The computer equipment has a…

A: Depreciation:   Depreciation expense is a non-cash expense, which is recorded on the income…

Q: Due to an error in computing depreciation expense, Crote Corporation understated accumulated…

A: Paid in capital means the amount contributed by share holder in company as share capitalRetained…

Q: On January 2, 2024, Tobias Company began using straight-line depreciation for a certain class of…

A: Changing the method of depreciation involves altering the way a company allocates the cost of its…

Q: The accounting profit before tax of Lindfield Ltd for the year ended 30 June 2022 was $150,000,…

A: The current tax liability seems to be the expected sum of tax or incurred tax obligation on earnings…

Q: During 2021, Raines Umbrella Corporation had sales of $860,000. Cost of goods sold, administrative…

A: Net Income = Sales - Cost of goods sold - administrative and selling expenses -  depreciation…

Q: On January 1, 2021. Ameen Company purchased major pieces of manufacturing equipment for a total of…

A: Deferred tax liability is the amount of taxes that are required to be paid in the future. Thus, this…

Q: Ayres Services acquired an asset for $80 million in 2024. The asset is depreciated for financial…

A: When a tax obligation is accrued in one fiscal year but becomes payable in a later year, a deferred…

Q: In 2020, Lambeau Inc. suffered a loss of $250,000. The enacted tax rate is 25%. Prepare Lambeau's…

A: Tax loss carry forward is when net operating loss is a year is carried forward to reduce taxable…

Q: Wynn Farms reported a net operating loss of $195,000 for financial reporting and tax purposes in…

A: Income Tax: The tax that taxpayers pay on the income earned by them in any accounting year is termed…

Q: Bramble Corporation's pre-tax accounting income of $724,000 for the year 2023 included the following…

A: To calculate the normalized earnings amount for Bramble Corporation in 2023, we need to adjust the…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.