Using the facts of Problem 10, determine the following. a. The 2019 end-of-year balance in Cortezs deferred
Question:
Using the facts of Problem 10, determine the following.
a. The 2019 end-of-year balance in Cortez’s deferred tax asset and deferred tax liability balance sheet accounts.
b. The value to Cortez of the accelerated tax deduction for depreciation, considering the time value of money. Cortez earns an after-tax rate of return on capital of 8%.
Data From Problem 10
Cortez, Inc., reports $600,000 of pretax book net income in 2019. Cortez’s book depreciation exceeds tax depreciation that year by $20,000. The corporation reports no other temporary or permanent book-tax differences. Cortez’s pertinent U.S. tax rate is 21%. Compute Cortez’s total income tax expense, current income tax expense, and deferred income tax expense.
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South-Western Federal Taxation 2020 Essentials Of Taxation Individuals And Business Entities
ISBN: 9780357109175
23rd Edition
Authors: Annette Nellen, James C. Young, William A. Raabe, David M. Maloney