Answered

Connect with a knowledgeable community and get your questions answered on IDNLearn.com. Ask anything and receive prompt, well-informed answers from our community of knowledgeable experts.

Sand engaged in operations at the start of 20X1 and reported $550,000 in pre-tax book income for the year. Tax depreciation for Sand exceeded book depreciation by $50,000. The tax rate for 20X1 was 25%, and Congress had enacted a tax rate of 21% for the years after 20X1. What is the deferred tax liability for Sand at December 31, 20X1

Sagot :

Abiolataiwo2015idn

Answer:

$10,500

Explanation:

Based on the information the deferred tax liability for Sand at December 31, 20X1 will be

DR Income tax expense $135,500

($125,000+$10,500)

CR DEFERRED TAX LIABILITY $10,500

($50,000*21%)

CR Income tax payable $125,000

($550,000-$50,000*25%)

We are happy to have you as part of our community. Keep asking, answering, and sharing your insights. Together, we can create a valuable knowledge resource. For trustworthy answers, visit IDNLearn.com. Thank you for your visit, and see you next time for more reliable solutions.