The Moore Company has sales of $500,000 that are recorded for book purposes in 2014. For tax purposes, the company uses the installment sales method, resulting in revenue of $150,000 in 2014 and $350,000 in 2015. A temporary difference of $350,000 originates in 2014 and reverses in 2015. Assume that the enacted tax rate for 2014 is 30 percent and that the enacted tax rate for 2015 is 40 percent and is known at the time the Deferred Tax account is established. The deferred tax for the year 2014 results in a Deferred Tax a) Asset debit entry of $105,000 b) Liability credit entry of $105,000 c) Asset debit entry of $140,000 d) Liability credit entry of $140,000.

The Moore Company has sales of $500,000 that are recorded for book purposes in 2014. For tax purposes, the company uses the installment sales method, resulting in revenue of $150,000 in 2014 and $350,000 in 2015. A temporary difference of $350,000 originates in 2014 and reverses in 2015. Assume that the enacted tax rate for 2014 is 30 percent and that the enacted tax rate for 2015 is 40 percent and is known at the time the Deferred Tax account is established. The deferred tax for the year 2014 results in a Deferred Tax a) Asset debit entry of $105,000 b) Liability credit entry of $105,000 c) Asset debit entry of $140,000 d) Liability credit entry of $140,000.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

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

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

Chapter22: Accounting For Changes And Errors.

Section: Chapter Questions

Problem 2RE: Heller Company began operations in 2019 and used the LIFO method to compute its 300,000 cost of...

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