Prance, Inc., earned pretax book net income of $1,677,000 in 2020. Prance acquired a depreciable asset in 2020, and first-year tax depreciation exceeded book depreciation by $167,700. In 2021, Prance reports $1,173,900 of pretax book net income, and the book depreciation exceeds tax depreciation that year by $41,925. Prance reports no other temporary or permanent book-tax differences. Assume the pertinent U.S. Federal corporate income tax rate is 21% and Prance earned an after-tax rate of return on capital of 8%. Enter below the 2021 Prance's deferred tax expense and any deferred tax asset or liability. If an amount is zero, enter "0". If required, round your answer to nearest whole value. Deferred tax asset account balance Deferred tax liability account balance i a. b. -26,413 c. In net present value terms, what has been the value to Prance of accelerating $41,925 of 2021 book depreciation to 2020? The present value tor at 8% is 0.9259. 8151 X Feedback

Prance, Inc., earned pretax book net income of $1,677,000 in 2020. Prance acquired a depreciable asset in 2020, and first-year tax depreciation exceeded book depreciation by $167,700. In 2021, Prance reports $1,173,900 of pretax book net income, and the book depreciation exceeds tax depreciation that year by $41,925. Prance reports no other temporary or permanent book-tax differences. Assume the pertinent U.S. Federal corporate income tax rate is 21% and Prance earned an after-tax rate of return on capital of 8%. Enter below the 2021 Prance's deferred tax expense and any deferred tax asset or liability. If an amount is zero, enter "0". If required, round your answer to nearest whole value. Deferred tax asset account balance Deferred tax liability account balance i a. b. -26,413 c. In net present value terms, what has been the value to Prance of accelerating $41,925 of 2021 book depreciation to 2020? The present value tor at 8% is 0.9259. 8151 X Feedback

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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