In 2021, Crane Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3710000. The facilities were sold in March 2022 and a $3710000 loss was recognized for tax purposes. Also in 2021, Crane paid $163200 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 20% in both 2021 and 2022, and that Crane paid $1280000 in income taxes in 2021, the amount reported as net deferred income taxes on Crane's balance sheet at December 31, 2021, should be a $371000 liability. $742000 asset. $1116800 asset. $371000 asset.
In 2021, Crane Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3710000. The facilities were sold in March 2022 and a $3710000 loss was recognized for tax purposes. Also in 2021, Crane paid $163200 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 20% in both 2021 and 2022, and that Crane paid $1280000 in income taxes in 2021, the amount reported as net deferred income taxes on Crane's balance sheet at December 31, 2021, should be a $371000 liability. $742000 asset. $1116800 asset. $371000 asset.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
In 2021, Crane Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3710000. The facilities were sold in March 2022 and a $3710000 loss was recognized for tax purposes. Also in 2021, Crane paid $163200 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 20% in both 2021 and 2022, and that Crane paid $1280000 in income taxes in 2021, the amount reported as net
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$371000 liability. |
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$742000 asset. |
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$1116800 asset. |
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$371000 asset. |
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