Calculate the deferred tax liability given the following items incurred in 2020 by Company B. Bonuses are tax deductible only in the year in which they are paid.
Accounting Income
$86,000
Depreciation Expense
$6,500
Tax Depreciation
$4,000
Income Not Recognized in The Current Period For Tax Purposes
$4,700
2019 Bonus Paid in 2020
$2,630
Accrued Bonuses in 2020
$3,500
Tax Rate
28%
Review Later
$350
$394
$425
$372
Answers
Answer:
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Explanation:
fissuksors7os47oso64o74s6o4so7s47p4dCalculate the deferred tax liability given the following items incurred in 2020 by Company B. Bonuses are tax deductible only in the year in which they are paid.
Accounting Income
$86,000
Depreciation Expense
$6,500
Tax Depreciation
$4,000
Income Not Recognized in The Current Period For Tax Purposes
$4,700
2019 Bonus Paid in 2020
$2,630
Accrued Bonuses in 2020
$3,500
Tax Rate
28%
Review Later
$350
$394
$425
$372Calculate the deferred tax liability given the following items incurred in 2020 by Company B. Bonuses are tax deductible only in the year in which they are paid.
Accounting Income
$86,000
Depreciation Expense
$6,500
Tax Depreciation
$4,000
Income Not Recognized in The Current Period For Tax Purposes
$4,700
2019 Bonus Paid in 2020
$2,630
Accrued Bonuses in 2020
$3,500
Tax Rate
28%
Review Later
$350
$394
$425
$372
Explanation
As Depreciation as per IT Act is lower than Cos Act, hence OTA will be created on [6500-4000]*28% = 700DTA
As Income not recognized during the years, as it will be Taxable in future years So OTL will created 4700 x28% = 1316 DTL
Accrued Bonus will be disallowed the during years.
Hence, it will be disallowed during the year and DTA will be created = 3500*28%.
DTA =980
Final creation of DTA = 1316-700-980 = 364
DTA = 364
Hence the deffered tax is calculated
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