Question
ABC Corporation provides you with the following information for the 2020 tax year, which was the companys first year of operation: Book Income Before Taxes
ABC Corporation provides you with the following information for the 2020 tax year, which was the companys first year of operation: Book Income Before Taxes $100,000,000 Book Depreciation $ 5,000,000 MACRS Depreciation $ 7,500,000 Foreign Sourced Income $ 40,000,000 Assume a federal tax rate of 21%, disregard state taxes. a. Calculate federal taxable income. b. Calculate the federal tax payable and federal tax expense. c. Given your answer above in b., is a deferred tax asset or a deferred tax liability created? Provide the journal entry needed to reflect this.
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