Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $208,600 (46,900) 224,500 $386,200 In analyzing the temporary differences, you find that $30,700 of the depreciation temporary difference will reverse in 2017, and $115,300 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years is 40%. Indicate the manner which deferred taxes should be presented on Carla Company's December 31, 2016, balance sheet.
Temporary Differences 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on the tax return when paid. 3. Accrual method used for book purposes and installment method used for tax purposes for an isolated installment sale of an investment. Resulting Balances in Deferred Taxes $208,600 (46,900) 224,500 $386,200 In analyzing the temporary differences, you find that $30,700 of the depreciation temporary difference will reverse in 2017, and $115,300 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years is 40%. Indicate the manner which deferred taxes should be presented on Carla Company's December 31, 2016, balance sheet.
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 9MC: Brooks Company reported a prior period adjustment of 512,000 in pretax financial "income" and...
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