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. Balance Sheet Deferred tax liability Income Statement Deferred tax expense Prance's total tax expense will consist of the following: Current tax expense Deferred tax expense Total tax expense 16,800✔ 16,800 0X 28,000 X 280,000 X
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. Balance Sheet Deferred tax liability Income Statement Deferred tax expense Prance's total tax expense will consist of the following: Current tax expense Deferred tax expense Total tax expense 16,800✔ 16,800 0X 28,000 X 280,000 X
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Qw.18.
Transcribed Image Text: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.
Balance Sheet
Deferred tax liability
Income Statement
Deferred tax expense
Prance's total tax expense will consist of the following:
Current tax expense
Deferred tax expense
Total tax expense
16,800✔
16,800
0X
28,000 X
280,000 X
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