Mini, Inc., ears pretax book net income of $1,420,000 in 2021, its first year of operations. Mini recognized $226,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini reports $1,491,000 of pretax book net income in 2022. Mini did not recognize any bad debt expense for book purposes in 2022 but did deduct $169,800 in bad debt expense for tax purposes. Mini reports no other temporary or permanent book-tax differences. The applicable U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%. Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense. If an amount is zero, enter "0". If required, round your answer to nearest whole value. 2022 a. Total tax benefit or expense b. Deferred tax benefit or expense c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8% in 0.9615. 65,753 X 313,110 35,658 ✔

Mini, Inc., ears pretax book net income of $1,420,000 in 2021, its first year of operations. Mini recognized $226,400 in bad debt expense for book purposes. This expense is not yet deductible for tax purposes. Mini reports $1,491,000 of pretax book net income in 2022. Mini did not recognize any bad debt expense for book purposes in 2022 but did deduct $169,800 in bad debt expense for tax purposes. Mini reports no other temporary or permanent book-tax differences. The applicable U.S. Federal corporate income tax rate is 21%, and Mini earns an after-tax rate of return on capital of 4%. Enter below the 2022 end-of-year balance in Mini's deferred tax benefit or expense and total tax benefit or expense. If an amount is zero, enter "0". If required, round your answer to nearest whole value. 2022 a. Total tax benefit or expense b. Deferred tax benefit or expense c. In net present value terms, what has been the cost to Mini of the deferred tax deduction for bad debts? The present value factor at 8% in 0.9615. 65,753 X 313,110 35,658 ✔

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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