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For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 14 15 16 2025 2026 2027 C. d. Depreciatio $1,212,000 $1,665,000 $1,750,000 n B 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. $987,000 b. Difference $320,000 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000

For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 14 15 16 2025 2026 2027 C. d. Depreciatio $1,212,000 $1,665,000 $1,750,000 n B 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. $987,000 b. Difference $320,000 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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5 6 7 For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 2025 2026 2027 C. d. Depreciatio $987,000 $1,212,000 $1,665,000 $1,750,000 n Difference $320,000 8 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. 14 b. 15 16 17 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000 55
Transcribed Image Text:5 6 7 For calendar year 2024, Kane Corp. reported depreciation of $1,600,000 in its income statement. On its 2024 income tax return, Kane reported depreciation of $2,400,000. Kane's income statement also included $300,000 accrued warranty expense that will be deducted for tax purposes when paid. Kane's taxable income was $5,200,000, and the enacted tax rates are 21% for 2024 and 24% for 2025 and thereafter. The depreciation difference and warranty expense will reverse over the next three years as follows: 2025 2026 2027 C. d. Depreciatio $987,000 $1,212,000 $1,665,000 $1,750,000 n Difference $320,000 8 9 10 11 12 Kane previously had no deferred taxes, and these were Kane's only temporary differences. In Kane's 2024 income statement, income tax expense should be 13 a. 14 b. 15 16 17 280,000 200,000 $800,000 Warranty Expense $60,000 100,000 140,000 $300,000 55
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