In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid $156000 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 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred income taxes on Sheridan's balance sheet at December 31, 2025, should be a O $698800 asset. $365000 asset. O $365000 liability. O $730000 asset.
In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid $156000 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 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred income taxes on Sheridan's balance sheet at December 31, 2025, should be a O $698800 asset. $365000 asset. O $365000 liability. O $730000 asset.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of
$3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid
$156000 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 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred
income taxes on Sheridan's balance sheet at December 31, 2025, should be a
O $698800 asset.
O $365000 asset.
O $365000 liability.
O $730000 asset.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F04bdff60-33d3-4378-b6e9-779f2e3749f6%2F991df61c-9e20-4a46-a4a0-8e72320009fc%2Fuqbsoz_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of
$3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid
$156000 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 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred
income taxes on Sheridan's balance sheet at December 31, 2025, should be a
O $698800 asset.
O $365000 asset.
O $365000 liability.
O $730000 asset.
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