57 6 Dints eBook Print ferences: The long-term liabilities section of CPS Transportation's December 31, 2023, balance sheet included the following: (EV of $1. PV of $1. EVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) Note: Use appropriate factor(s) from the tables provided. a. A lease liability with 15 remaining lease payments of $10,000 each, due annually on January 1: Lease liability Less: current portion $ 76,061 2,394 $ 73,667 The incremental borrowing rate at the inception of the lease was 11% and the lessor's implicit rate, which was known by CPS Transportation, was 10%. b. A deferred income tax liability due to a single temporary difference. The only difference between CPS Transportation's taxable income and pretax accounting income is depreciation on a machine acquired on January 1, 2023, for $500,000. The machine's estimated useful life is five years, with no salvage value. Depreciation is computed using the straight-line method for financial reporting purposes and the MACRS method for tax purposes. Depreciation expense for tax and financial reporting purposes for 2024 through 2027 is as follows: Straight-line Depreciation Difference Year 2024 MACRS Depreciation $ 160,000 2025 2026 80,000 70,000 $ 100,000 100,000 100,000 $ 60,000 (20,000) 2027 60,000 100,000 (30,000) (40,000) The enacted federal income tax rates are 20% for 2023 and 25% for 2024 through 2027. CPS had a deferred tax liability of $7,500 as of December 31, 2023. For the year ended December 31, 2024, CPS's income before income taxes was $900,000. On July 1, 2024, CPS Transportation issued $800,000 of 9% bonds. The bonds mature in 20 years, and interest is payable each January 1 and July 1. The bonds were issued at a price to yield the investors 10%. CPS records interest at the effective interest rate. Required: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2024. 2. Determine CPS Transportation's interest expense for the year ended December 31, 2024. Save & Required: 1. Determine CPS Transportation's income tax expense and net income for the year ended December 31, 202- 2. Determine CPS Transportation's interest expense for the year ended December 31, 2024. 3. Prepare the long-term liabilities section of CPS Transportation's December 31, 2024, balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine CPS Transportation's income tax expense and net income for the year ended December 31, 2024. Note: Enter your answers in whole dollars. CPS TRANSPORTATION Income Tax Expense and Net Income For the Year Ended December 31, 2024 Income before income taxes Income tax expense: Current Deferred i Net income 0 0 Complete this question by entering your answers in the tabs below. Book Required 1 Required 2 Required 3 rint ences Determine CPS Transportation's interest expense for the year ended December 31, 2024. Note: Do not round intermediate calculations. Enter your answers in whole dollars. CPS TRANSPORTATION Calculation of Interest Expense For the Year Ended December 31, 2024 Lease obligation Bonds payable Total interest expense $ 0 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the long-term liabilities section of CPS Transportation's December 31, 2024, balance sheet. Note: Do not round intermediate calculations. Enter your answers in whole dollars. CPS TRANSPORTATION Long-Term Liabilities Section of Balance Sheet Long-term liabilities: December 31, 2024 Lease liability Less: current portion Bonds payable, net Deferred tax liability Total long-term liabilities $ 0 $