please answer within 30 minutes. Pop Corporation uses the equity method to account for its 25% investmentin Son Corporation. During 2016, Pop received dividends of $ 60,000 fromSon and recorded $360,000 as its equity in the earnings of Son. Additionalinformation follows:The dividends received from Son are eligible for the 80 percent dividends -received deduction.There are no other temporary differences.Enacted income tax rates are 30 percent for 2016 and thereafter.In its December 31,2016, balance sheet, what amount should pop report fordeferred income tax liability?a.$18,000b.$21,600c.$90,000d.$108,000

Given in the question: Dividend received = $60,000 Equity earnings in the Son = $360,000 POP…

Answered: In its December 31,2016, balance sheet,…

Business

Accounting

In its December 31,2016, balance sheet, what amount should pop report for deferred income tax liability?

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

please answer within 30 minutes.

Pop Corporation uses the equity method to account for its 25% investment
in Son Corporation. During 2016, Pop received dividends of $ 60,000 from
Son and recorded $360,000 as its equity in the earnings of Son. Additional
information follows:
The dividends received from Son are eligible for the 80 percent dividends -
received deduction.
There are no other temporary differences.
Enacted income tax rates are 30 percent for 2016 and thereafter.
In its December 31,2016, balance sheet, what amount should pop report for
deferred income tax liability?
a.$18,000
b.$21,600
c.$90,000
d.$108,000

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