The following information has been provided for Relink Corporation for 20X2-20X5: 20X2 20X3 20X4 20X5 Capital asset additions $ 1,001,007 $0 $2,015,000 $0 Depreciation expense 115,000 115,000 315,000 315,000 Capital cost allowance 215, 000 175,000 543, 000 437, 400 Development costs incurred 105,000 115,000 135, 000 65,000 Development costs amortized 0 33,000 53,000 65,000 Tax rate 40 % 37% 37 % 35 % Required: 1. What is the tax basis of the capital assets in each year? 2. What is the tax basis of the development costs in each year? 3. What is the accounting basis of the capital assets in each year? 4. What is the accounting basis of the development costs in each year? 5. What is the deferred tax balance in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) 6. Is the deferred tax balance in each year an asset or a liability? multiple choice Asset Liability
The following information has been provided for Relink Corporation for 20X2-20X5: 20X2 20X3 20X4 20X5 Capital asset additions $ 1,001,007 $0 $2,015,000 $0 Depreciation expense 115,000 115,000 315,000 315,000 Capital cost allowance 215, 000 175,000 543, 000 437, 400 Development costs incurred 105,000 115,000 135, 000 65,000 Development costs amortized 0 33,000 53,000 65,000 Tax rate 40 % 37% 37 % 35 % Required: 1. What is the tax basis of the capital assets in each year? 2. What is the tax basis of the development costs in each year? 3. What is the accounting basis of the capital assets in each year? 4. What is the accounting basis of the development costs in each year? 5. What is the deferred tax balance in each year? (Negative amounts and deductible amounts should be indicated by a minus sign.) 6. Is the deferred tax balance in each year an asset or a liability? multiple choice Asset Liability
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The following information has been provided for Relink Corporation for 20X2-20X5: 20X2 20X3 20X4 20X5
Capital asset additions $ 1,001,007 $0 $2,015,000 $0 Depreciation expense
115,000 115,000 315,000 315,000 Capital cost allowance 215, 000 175,000 543, 000 437, 400 Development
costs incurred 105,000 115,000 135, 000 65,000 Development costs amortized 0 33,000 53,000 65,000 Tax
rate 40 % 37% 37 % 35 % Required: 1. What is the tax basis of the capital assets in each year? 2. What
is the tax basis of the development costs in each year? 3. What is the accounting basis of the capital
assets in each year? 4. What is the accounting basis of the development costs in each year? 5. What is
the deferred tax balance in each year? (Negative amounts and deductible amounts should be indicated
by a minus sign.) 6. Is the deferred tax balance in each year an asset or a liability? multiple choice Asset
Liability
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