Alvis Corporation reports pretax accounting income of $400,000, but due to a single temporary difference, taxable income

Question:

Alvis Corporation reports pretax accounting income of $400,000, but due to a single temporary difference, taxable income is only $250,000. At the beginning of the year, no temporary differences existed.

Required:
1. Assuming a tax rate of 25%, what will be Alvis’s net income?
2. What will Alvis report in the balance sheet pertaining to income taxes?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...