Exercise 19-20 (Part Level Submission) The differences between the book basis and tax basis of the assets and liabilities of Sunland Corporation at the end of 2016 are presented below. Accounts receivable Litigation liability Payable Deferred Tax Liability It is estimated that the litigation liability will be settled in 2017. The difference in accounts receivable will result in taxable amounts of $32,900 in 2017 and $12,800 in 2018. The company has taxable income of $382,000 in 2016 and is expected to have taxable income in each of the following 2 years. Its enacted tax rate is 34% for all years. This is the company's first year of operations. The operating cycle of the business is 2 years. Income Tax Expense Deferred Tax Asset Income Tax to record income tax expense, deferred income taxes, and income taxes payable for 2016 Indicate how deferred income taxes will be Book Basis reported on the balance sheet at the end of 2016. $45,700 30,600 135014 10404 129880 Tax Basis 15538 $0 0

Exercise 19-20 (Part Level Submission) The differences between the book basis and tax basis of the assets and liabilities of Sunland Corporation at the end of 2016 are presented below. Accounts receivable Litigation liability Payable Deferred Tax Liability It is estimated that the litigation liability will be settled in 2017. The difference in accounts receivable will result in taxable amounts of $32,900 in 2017 and $12,800 in 2018. The company has taxable income of $382,000 in 2016 and is expected to have taxable income in each of the following 2 years. Its enacted tax rate is 34% for all years. This is the company's first year of operations. The operating cycle of the business is 2 years. Income Tax Expense Deferred Tax Asset Income Tax to record income tax expense, deferred income taxes, and income taxes payable for 2016 Indicate how deferred income taxes will be Book Basis reported on the balance sheet at the end of 2016. $45,700 30,600 135014 10404 129880 Tax Basis 15538 $0 0

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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