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1question 2 part USE THE FOLLOWING INFORMATION FOR THE NEXT 5 QUESTIONS: Surf Corporation uses the Allowance Method as required by GAAP to record estimated
1question 2 part
USE THE FOLLOWING INFORMATION FOR THE NEXT 5 QUESTIONS: Surf Corporation uses the Allowance Method as required by GAAP to record estimated uncollectible accounts receivable. For tax purposes the allowance method is NOT permitted and therefore the deduction for bad debts is only permitted once the account receivable is actually written off (cash method) as uncollectible. Surf made the following entry for BOOK in 20X2: Bad Debt Expense (debit) $45,000 Allowance for Bad Debts (credit) $45,000 Surf made the following entry for BOOK in 20X4: Allowance for Bad Debts (debit) $45,000 Accounts Receivable - Smith Company (credit) $45,000 Book income for 20X2 = $198,000 Book income for 20x3 = $63,450 Book income for 20X4 = $224,750 Tax rate = 18% INPUT INSTRUCTIONS: 1. Do not use dollar signs, commas or decimals. 2. Round your answers to the nearest dollar. Q#3: Calculate the deferred tax asset OR the deferred tax liability at 12/31/X2. 1. Input an amount. 2. Do not use dollar signs, decimals or negative numbers. Q#4: Calculate the balance in the deferred tax asset OR liability at 12/31/X3. 1. Input an amount. 2. Do not use dollar signs, decimals or negative numbersStep by Step Solution
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