Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense. If an amount is zero, enter "0". If required, round your answers to the nearest dollar. 2022 Total tax benefit or expense b. Deferred tax benefit or expense c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8% is 0.9615.
Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense. If an amount is zero, enter "0". If required, round your answers to the nearest dollar. 2022 Total tax benefit or expense b. Deferred tax benefit or expense c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8% is 0.9615.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
N1.
Account
![Mini, Inc., earns pretax book net income of $750,000 in 2021, its first year of operations. Mini recognized $20,000 in bad debt expense for
book purposes. This expense is not yet deductible for tax purposes. Mini reports no other temporary or permanent book-tax differences.
The U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%.
Enter below the 2021 deferred tax assets and liabilities, deferred tax benefit or expense, and total tax benefit or expense.
Balance Sheet
Deferred tax asset
Income Statement
Deferred tax benefit
Mini's total tax expense will be:
Current tax expense
Deferred tax benefit
Total tax expense
10000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2dbf05e8-4609-48ee-b8a3-5dc8c1c2617c%2Fe040fea9-f350-4cfe-aa33-aa8b62b5413b%2Fpz6flrm_processed.png&w=3840&q=75)
Transcribed Image Text:Mini, Inc., earns pretax book net income of $750,000 in 2021, its first year of operations. Mini recognized $20,000 in bad debt expense for
book purposes. This expense is not yet deductible for tax purposes. Mini reports no other temporary or permanent book-tax differences.
The U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%.
Enter below the 2021 deferred tax assets and liabilities, deferred tax benefit or expense, and total tax benefit or expense.
Balance Sheet
Deferred tax asset
Income Statement
Deferred tax benefit
Mini's total tax expense will be:
Current tax expense
Deferred tax benefit
Total tax expense
10000
![Mini, Inc., earns pretax book net income of $750,000 in 2021, its first year of operations. Mini recognized $20,000 in bad debt expense for
book purposes. This expense is not yet deductible for tax purposes.
Mini reports $800,000 of pretax book net income in 2022. Mini did not recognize any bad debt expense for book purposes in 2022 but did
deduct $15,000 in bad debt expense for tax purposes. Mini reports no other temporary or permanent book-tax differences. The applicable
U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%.
Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense.
If an amount is zero, enter "0". If required, round your answers to the nearest dollar.
a. Total tax benefit or expense
b. Deferred tax benefit or expense
2022
c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8%
is 0.9615.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2dbf05e8-4609-48ee-b8a3-5dc8c1c2617c%2Fe040fea9-f350-4cfe-aa33-aa8b62b5413b%2Fad7ar3_processed.png&w=3840&q=75)
Transcribed Image Text:Mini, Inc., earns pretax book net income of $750,000 in 2021, its first year of operations. Mini recognized $20,000 in bad debt expense for
book purposes. This expense is not yet deductible for tax purposes.
Mini reports $800,000 of pretax book net income in 2022. Mini did not recognize any bad debt expense for book purposes in 2022 but did
deduct $15,000 in bad debt expense for tax purposes. Mini reports no other temporary or permanent book-tax differences. The applicable
U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%.
Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense.
If an amount is zero, enter "0". If required, round your answers to the nearest dollar.
a. Total tax benefit or expense
b. Deferred tax benefit or expense
2022
c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8%
is 0.9615.
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