Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:Received rent from Jane, Co. for 2016$64,000Municipal bond income$80,000Depreciation for tax purposes in excess of book depreciation$40,000Installment sales revenue to be collected in 2016$108,000 6. At the end of 2015, which of the following deferred tax accounts and balances is reported on Rowen, Inc.’s balance sheet?AccountBalance a. Deferred tax asset$32,000 b. Deferred tax liability$32,000 c. Deferred tax asset$59,200 d. Deferred tax liability$59,200

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Answered: Rowen, Inc. had pre-tax accounting…

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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Rowen, Inc. had pre-tax accounting income of $1,672,000 and a tax rate of 40% in 2015, its first year of operations. During 2015 the company had the following transactions:

Received rent from Jane, Co. for 2016	$64,000
Municipal bond income	$80,000
Depreciation for tax purposes in excess of book depreciation	$40,000
Installment sales revenue to be collected in 2016	$108,000

6. At the end of 2015, which of the following deferred tax accounts and balances is reported on Rowen, Inc.’s balance sheet?

Account	Balance
a. Deferred tax asset	$32,000
b. Deferred tax liability	$32,000
c. Deferred tax asset	$59,200
d. Deferred tax liability	$59,200

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