Assume Maple Corporation has just completed the third year of its existence (year 3). The table below indicates Maple's ending bookinventory for each year and the additional §263A costs it was required to include in its ending inventory. Maple immediately expensedthese costs for book purposes. In year 2, Maple sold all of its year 1 ending inventory, and in year 3 it sold all of its year 2 endinginventory.Ending book inventoryAdditional $263A costsEnding tax inventoryYear 1$ 2,400,00060,000$ 2,460,000Year 2$ 2,700,00070,000$ 2,770,000Year 3.$ 2,040,00040,000$ 2,080,000Required:a. What book-tax difference associated with its inventory did Maple report in year 1? Was the difference favorable or unfavorable? Wasit permanent or temporary? Complete this question by entering your answers in the tabs below.Required A Required BRequired CWhat book-tax difference associated with its inventory did Maple report in year 1? Was the difference favorable orunfavorable? Was it permanent or temporary?Book-tax differenceWas the difference favorable or unfavorable?Was it permanent or temporary?

Name: Assume Maple Corporation has just completed the third year of its exi
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Description: Assume Maple Corporation has just completed the third year of its existence (year 3). The table below indicates Maple's ending bookinventory for each year and the additional §263A costs it was required to include in its ending inventory. Maple immed

Ending Book Entry2400000Add: Additional IRC60000Ending Tax inventory2460000Book tax difference60000

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Required A Required B Required C What book-tax difference associated with its inventory did Maple report in year 1? Was the difference favorable or unfavorable? Was it permanent or temporary? Book-tax difference Was the difference favorable or unfavorable? Was it permanent or temporary?

Required A Required B Required C What book-tax difference associated with its inventory did Maple report in year 1? Was the difference favorable or unfavorable? Was it permanent or temporary? Book-tax difference Was the difference favorable or unfavorable? Was it permanent or temporary?

Intermediate Accounting: Reporting And Analysis

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Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter22: Accounting For Changes And Errors.

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Problem 5RE: Bloom Company had beginning unadjusted retained earnings of 400,000 in the current year. At the...

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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Question

Assume Maple Corporation has just completed the third year of its existence (year 3). The table below indicates Maple's ending book
inventory for each year and the additional §263A costs it was required to include in its ending inventory. Maple immediately expensed
these costs for book purposes. In year 2, Maple sold all of its year 1 ending inventory, and in year 3 it sold all of its year 2 ending
inventory.
Ending book inventory
Additional $263A costs
Ending tax inventory
Year 1
$ 2,400,000
60,000
$ 2,460,000
Year 2
$ 2,700,000
70,000
$ 2,770,000
Year 3.
$ 2,040,000
40,000
$ 2,080,000
Required:
a. What book-tax difference associated with its inventory did Maple report in year 1? Was the difference favorable or unfavorable? Was
it permanent or temporary?

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