Prance, Inc., earned pretax book net income of $800,000 in 2021. Prance acquired a depreciable asset that year, and first-year tax depreciation exceeded book depreciation by $80,000. Prance reported no other temporary or permanent book-tax differences. The pertinent U.S. Federal corporate income tax rate is 21%, and Prance earned an after-tax rate of return on capital of 4%. Enter below Prance's 2021 deferred tax benefit or expense and any deferred tax asset or liability. What is the Deferred tax liability?

Q: Alvis Corporation reports pretax accounting income of $320,000, but due to a single temporary…

A:

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Q: (EBIT).

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A: Calculate the net income of Company Alvis’s:

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A: Solution: Pretax income = Annual revenue - Expenses other than depreciation - Depreciation expense…

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A: The following computations are done as per the information provided.

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Q: Prance, Inc., earned pretax book net income of $800,000 in 2021. Prance acquired a depreciable asset…

A: Tax expense refers to an amount that is charged by an individual or corporation to the local, state,…

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A: Pretax book income means earning before the tax .In other words it is the income before deducting…

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A: Deferred tax expense refers to the effect of income tax occured on the balance sheet of the company…

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Q: Grand Corporation reported pretax book income of $627.500. Tax depreciation exceeded book…

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Q: Grand Corporation reported pretax book income of $639,000. Tax depreciation exceeded book…

A: The following computations are done as per the information provided.

Q: Grand Corporation reported pretax book income of $663,000. Tax depreciation exceeded book…

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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.