Using straight-line depreciation for financial reporting purposes and MACRS for tax purposes in the first year of an asset's life creates a: a. Future deductible amount b. Permanent difference not requiring inter-period tax allocation c. Deferred tax asset d. Deferred tax liability

Using straight-line depreciation for financial reporting purposes and MACRS for tax purposes in the first year of an asset's life creates a: a. Future deductible amount b. Permanent difference not requiring inter-period tax allocation c. Deferred tax asset d. Deferred tax liability

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

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 1P: Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are...

See similar textbooks

Related questions

Q: Consider the following information for

A: Formula for ROI:ROI = (Net Income / Total Assets) * 100For 2021:Net Income = 3,620,000Total Assets =…

Q: AAA corporation accounting period ends December 31 slove this accounting questions

A: Step 1: Define Accrued ExpensesIn accounting, accrued expenses relate to an organization's…

Q: Can you please answer the general accounting question?

A: Forward P/E Ratio = 12Current EPS = $1Expected EPS next year = $1.1Stock Price = Forward P/E…

Q: Expert solve the problem

A: Explanation of Commercial Substance: Commercial substance refers to whether an exchange transaction…

Q: Rosco Taxi Service uses the units of activity method in computing depreciation on its taxicabs.…

A: In the units-of-activity method, depreciation is based on the actual use of an asset, which in this…

Q: correct option want this account problems

A: Step 1: Understand the LCM RuleUnder the Lower-of-Cost-or-Market (LCM) rule, inventory is reported…

Q: Hello tutor please provide correct answer not used ai general accounting

A: Step 1: Define Operating LeverageThe operating leverage is one of the measures that are employed in…

Q: On January 1, 2025, a new Board of Directors was elected for Crane Hospital. the new board switched…

A: Background and RequirementsOn January 1, 2025, a new Board of Directors for Crane Hospital decided…

Q: ANSWER ME

A: Explanation of Temporal Sequencing: Temporal sequencing in accounting refers to the practice of…

Q: Kneller Co. Manufactures and sells medals for winners of athletics and other events. Please provide…

A: Step 1: Define Relevant Costs in Accepting an OrderThe relevant costs a company should consider in a…

Q: Paxton Company can produce a component of its product that incurs the following costs per unit:…

A: Step 1:In decision making process we consider relevant cost that is variable cost and fixed cost are…

Q: Hello tutor provide solution for this accounting problem

A: Step 1: Define Bank ReconciliationA bank reconciliation is the process of comparing the cash balance…

Q: Financial Accounting

A: To calculate the average return on Stock A over the five-year period, you can use the formula for…

Q: Beckinsale Inc. ROA

A: The formula for Return on Assets (ROA) is:ROA=Net Income/Total Assets×100 Step 1: Calculate Net…

Q: please find answer

A: Step 1: Understand the DataProduction Costs (5,000 units produced):Direct materials: $70,000Direct…

Q: A firm with no net debt reports cash solve this accounting questions

A: Step 1: Define Operating Cash FlowThe cash flows generated from the main operations of the business…

Q: Right choice for to this

A: Option a: This option is incorrect because adaptive accounting is the opposite of this. Systems for…

Q: Part 1 of 5 05 bints Knowledge Check 01 Which of the following statements about dividends are true?…

A: The question relates to the concept of dividends in a corporation. Dividends are a portion of a…

Q: Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and…

A: To calculate how much raw material Sarafiny Corporation should purchase during the year, we can use…

Q: Need help with this accounting question please solve this one

A: To calculate the profit, we will break it down into several parts:Revenue from Sales: The company…

Q: 14.2

A: Explanation of Factory Overhead: Factory overhead represents all manufacturing costs that cannot be…

Q: How does disaggregation analysis enhance revenue recognition? a) Separates complex contracts into…

A: Option a: This option is correct because it ensures accurate revenue recognition by aligning it with…

Q: 41 A company issues a $1,000 par value bond at 100. The bonds have one warrant attached to buy one…

A: See above

Q: h

A: Revenue from the one-time sale:200 units * $140/unit = $28,000Variable costs associated with the…

Q: Get the Solid

A: Step 1: Calculate total variable manufacturing cost per unit• Add Direct materials, Direct labor,…

Q: Please provide correct answer general accounting

A: Step 1: Define Predetermined Overhead RatePredetermined Overhead Rate is the estimated overhead rate…

Q: 28 A company's most recent balance sheet depicts the following amounts: Current assets: $400,000…

A: Step 1: Calculate total assetsStep 2: Calculate total liabilitiesStep 3: Compute debt-to-assets…

Q: E10-9 Computing Break-Even Plus Target VolumeLO4 Similar to Recall and Review 2 Teton, Inc. sells…

A: To determine the number of units needed to achieve a net operating income of $75,000, we need to…

Q: ?

A: Explanation of Structural Analysis: This refers to the systematic examination of how different…

Q: Hello tutor provide solution this general accounting question

A: Step 1: Define Work In Process InventoriesWork in process inventories refer to inventories that are…

Q: Account solution needed

A: Given Information:Finished Goods Inventory (beginning) = 120 unitsUnits Produced = 190 unitsUnits…

Q: 34 A company has 150,000 shares of $1 par value common stock outstanding on December 31. The stock…

A: Treasury Stock: This is a contra-equity account used to account for the cost of shares repurchased…

Q: Account Expert answer this question

A: Step 1: Understanding LCNRVUnder the LCNRV rule, inventory is valued at the lower of:Cost: The…

Q: Solve with explanation accounting questions

A: Step 1: Detailed explanation of Income Statement & Closing EntriesAn adjusted trial balance is…

Q: Denver Co. at the end of 20x1, its first year of operations, prepared reconciliation between pretax…

A: Step 1: Given DataPretax financial income: $300,000Extra depreciation taken for tax purposes:…

Q: I want correct answer

A: Explanation of LIFO (Last-In-First-Out): This is a cost flow assumption method used in inventory…

Q: Sales = 962,000, Variable Costs = 467,500, Fixed Costs = 165,000

A: Explanation of Operating Leverage: This is a measure that shows how changes in sales volume affect a…

Q: General accounting

A: Explanation of Performance Obligations: A performance obligation represents a promise in a contract…

Q: The county of aquilonia solve this accounting questions

A: Step 1: Define TaxThe term tax in economics and finance is used to denote the legal financial charge…

Q: Provide short and correct answer. Tag. Account

A: Step 1: Understanding the LCNRV RuleThe LCNRV rule requires inventory to be reported at the lower…

Q: ans

A: Explanation of Assurance Mapping:Assurance mapping is a methodical approach to aligning risk with…

Q: Hii expert please provide answer please not use chart gpt

A: Step 1: Define Joint CostsJoint costs relate to costs incurred for the production of more than one…

Q: Provide answer Accounting questions

A: Step 1: Define Promissory NotesPromissory notes are a type of notes that carry a fixed interest…

Q: Which option is accurate?

A: In an in-substance defeasance arrangement, the issuer sets up a trust with securities that will…

Q: PLEASE HELP ME WITH THIS ACCOUNTING PROBLEM! I DESPERATELY NEED HELP.

A: To address each of these requirements, we will break down the calculations step by step.1. Determine…

Q: give me step by step solution

A: Net Income = Sales * Profit MarginNet Income = 25,400,000*7.2%Net Income = $1,828,800 Return on…

Q: 26 A company purchases a piece of machinery by issuing a $300,000 five-year note payable. The stated…

A: Interest Expense = Principal Balance * Monthly Interest Rate= $300,000 * (6% / 12)= $1,500 Now, we…

Q: A company roi is 12.6% average assets are solved this question general accounting

A: Step 1: Define Net IncomeNet income is the amount of accounting profit after deducting all expenses.…

Q: posting in general account

A: Step 1:Inventory valuation method of lower of cost and net realisable value, valued inventory at the…

Q: General Accounting

A: To find out how much Karen must invest today in a savings account that pays 4% annually to have…

Question

provide correct and short answer. General Account

Using straight-line depreciation for financial reporting
purposes and MACRS for tax purposes in the first year
of an asset's life creates a:
a. Future deductible amount
b. Permanent difference not requiring inter-period tax
allocation
c. Deferred tax asset
d. Deferred tax liability

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

Please see attached image for question thank you
Which of the following is deducted from the financial income in computing for the taxable income? Excess of accounting depreciation from the allowed tax deduction Donations received during the year Penalties paid for late filing of tax returns Unrealized losses from FA@FVTOCI
1. The amount of income taxes that relate to financial income subject to tax is reported on the income statement as A. long-term deferred income taxes (credit) C. income tax expense B. current deferred income taxes (debit) D. income tax payable 2. An item that would create a permanent difference in pretax financial and taxable income would be A. using accelerated depreciation for tax purposes & straight line depreciation for book purposes. B. using the percentage of completion method on long-term construction contracts. C. purchasing equipment previously leased with an operating lease in prior years. D. paying fines for violation of laws. 3. Which of the following is the most likely item to result in a deferred tax asset? A. using completed contract method of recognizing construction revenue tax purposes, but using percentage of completion method for financial reporting purposes. B. using accelerated depreciation for tax purposes but straight-line depreciation for accounting purposes.…
A valuation allowance for deferred tax assets Select one: a. Is required when future deductible amounts are expected to be applied against future taxable income. b. Requires evidence that it is more likely than not that none of the deferred tax asset will be realized. c. Is a contra asset account shown on the tax return. d. Is likely to be recognized if a company expects losses in early future years.
Subject: acounting
Using the straight-line method of depreciation for reporting purposes and accelerateddepreciation for tax purposes would most likely result in a:A . valuation allowance.B . deferred tax asset.C . temporary diff erence.
Recognition of tax benefits in the loss year due to a NOL carry back involves: O The establishment of an income tax refund receivable. Only a note to the financial statements. The establishment of a deferred tax liability. O The establishment of a deferred tax asset.
Accounting profit is O A. The The profit or loss is for a period determined before deducting in accordance tax expense O B. The profit or loss is for a period determined in accordance with tax law C. The profit or loss after for a period after deducting tax expense O D. The profit or loss after current tax expense determined accordance with tax law
A net operating loss (NOL) carryforward creates: A-a deferred tax liability that should be classified as current liability B- a deferred tax asset that represents future tax benefit that can offset future taxable income O A O B Drouinun
Which of the following is an example of a temporary difference which would result in a deferred tax asset? a. Rent revenue collected in advance included in taxable income before it is included in accounting income b. Investment gains recognized earlier for accounting purposes than for tax purposes c. Use of straight-line method for accounting purposes and an accelerated rate for tax purposes d. Use of a longer depreciation period for accounting purposes than is used for tax purpose
1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent difference. (a) ______ For some assets, straight-line depreciation is used for tax purposes while double-declining balance method is used for financial reporting purposes.(b) ______ Warranty expenses are accrued when the sale is made, but cannot be deducted until the work is actually performed.(c) ______ The company uses the percentage of completion method to record revenue on long-term contracts for financial reporting purposes, but the completed contract method is used for tax purposes.(d) ______ Accelerated depreciation is used for tax purposes, and the straight-line depreciation method is used for financial reporting purposes, for some equipment.(e) ______ A landlord collects some…
For each item below, indicate whether it involves: 1. A temporary difference that will result in future deductible amounts and, therefore, will usually give rise to a deferred income tax asset. 2. A temporary difference that will result in future taxable amounts and, therefore, will usually give rise to a deferred income tax liability. 3. A permanent differerence Use the appropriate number to indicate your answer for each. A. For some assets, straight-line depreciation is used for tax purposes while double-declining balance method is used for financial reporting purposes. B. Warranty expenses are accrued when the sale is made, but cannot be deducted until the work is actually C. The company uses the percentage of completion method to record revenue on long-term contracts for financial reporting purposes, but the completed contract method is used for tax purposes. D. Accelerated depreciation is used for tax purposes, and the straight-line depreciation method is used for financial…