Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020. 1. Mooney Co. has developed the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 2025 Taxable amounts $300 $300 $300 $ 300 $300 Deductible amount — — — (1,600) — 2. Roesch Co. has the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 Taxable amounts $300 $300 $ 300 $300 Deductible amount — — (2,300) — Both Mooney Co. and Roesch Co. have taxable income of $4,000 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. Instructions For each of these two situations, compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet.
Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020. 1. Mooney Co. has developed the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 2025 Taxable amounts $300 $300 $300 $ 300 $300 Deductible amount — — — (1,600) — 2. Roesch Co. has the following schedule of future taxable and deductible amounts. 2021 2022 2023 2024 Taxable amounts $300 $300 $ 300 $300 Deductible amount — — (2,300) — Both Mooney Co. and Roesch Co. have taxable income of $4,000 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities. Instructions For each of these two situations, compute the net amount of deferred income taxes to be reported at the end of 2020, and indicate how it should be classified on the balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2020.
1. Mooney Co. has developed the following schedule of future taxable and deductible amounts.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
| Taxable amounts | $300 | $300 | $300 | $ 300 | $300 |
| Deductible amount | — | — | — | (1,600) | — |
2. Roesch Co. has the following schedule of future taxable and deductible amounts.
| 2021 | 2022 | 2023 | 2024 | |
| Taxable amounts | $300 | $300 | $ 300 | $300 |
| Deductible amount | — | — | (2,300) | — |
Both Mooney Co. and Roesch Co. have taxable income of $4,000 in 2020 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2020 are 30% for 2020–2023 and 35% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities.
Instructions
For each of these two situations, compute the net amount of
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