P9-13 (Static) Recording and Reporting Deferred Income Tax: Depreciation (Supplement B) LO9-6 [The following information applies to the questions displayed below.] Mansfield Corporation purchased a new piece of equipment at the beginning of Year 1 for $1,000,000. The expected life of the asset is 20 years with no residual value. The company uses straight-line depreciation for financial reporting purposes and accelerated depreciation for tax purposes (the accelerated method results in $100,000 of depreciation each year). The company's federal income tax rate is 21%. The company determined its income tax obligations for Year 1 and Year 2 were $400,000 and $625,000, respectively. P9-13 Part 1 Required: 1-a. Compute the deferred income tax amount reported on the balance sheet for each year. Deferred Income Tax Year 1 $ 950,000 Year 2
P9-13 (Static) Recording and Reporting Deferred Income Tax: Depreciation (Supplement B) LO9-6 [The following information applies to the questions displayed below.] Mansfield Corporation purchased a new piece of equipment at the beginning of Year 1 for $1,000,000. The expected life of the asset is 20 years with no residual value. The company uses straight-line depreciation for financial reporting purposes and accelerated depreciation for tax purposes (the accelerated method results in $100,000 of depreciation each year). The company's federal income tax rate is 21%. The company determined its income tax obligations for Year 1 and Year 2 were $400,000 and $625,000, respectively. P9-13 Part 1 Required: 1-a. Compute the deferred income tax amount reported on the balance sheet for each year. Deferred Income Tax Year 1 $ 950,000 Year 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
P9-13 (Static) Recording and Reporting Deferred Income Tax: Depreciation (Supplement B) LO9-6
[The following information applies to the questions displayed below.]
Mansfield Corporation purchased a new piece of equipment at the beginning of Year 1 for $1,000,000. The expected life of
the asset is 20 years with no residual value. The company uses straight-line depreciation for financial reporting purposes
and accelerated depreciation for tax purposes (the accelerated method results in $100,000 of depreciation each year).
The company's federal income tax rate is 21%. The company determined its income tax obligations for Year 1 and Year 2
were $400,000 and $625,000, respectively.
P9-13 Part 1
Required:
1-a. Compute the deferred income tax amount reported on the balance sheet for each year.
Deferred
Income Tax
Year 1
$
950,000
Year 2](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff9037101-03ed-43d5-84b9-7b66f422047a%2F41ab9c35-f890-48dd-ace4-40cee832abd4%2Fy9wdt1g_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
P9-13 (Static) Recording and Reporting Deferred Income Tax: Depreciation (Supplement B) LO9-6
[The following information applies to the questions displayed below.]
Mansfield Corporation purchased a new piece of equipment at the beginning of Year 1 for $1,000,000. The expected life of
the asset is 20 years with no residual value. The company uses straight-line depreciation for financial reporting purposes
and accelerated depreciation for tax purposes (the accelerated method results in $100,000 of depreciation each year).
The company's federal income tax rate is 21%. The company determined its income tax obligations for Year 1 and Year 2
were $400,000 and $625,000, respectively.
P9-13 Part 1
Required:
1-a. Compute the deferred income tax amount reported on the balance sheet for each year.
Deferred
Income Tax
Year 1
$
950,000
Year 2
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