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At the beginning of 2015; Elephant, Inc. had a deferred tax asset of $10,000 and a deferred tax liability of $15,000. Pre-tax accounting income for

At the beginning of 2015; Elephant, Inc. had a deferred tax asset of $10,000 and a deferred tax liability of $15,000. Pre-tax accounting income for 2015 was $750,000 and the enacted tax rate is 40%. The following items are included in Elephants pre-tax income:

Interest income from municipal bonds

$ 60,000

Accrued warranty costs, estimated to be paid in 2016

$130,000

Operating loss carryforward

$ 95,000

Installment sales revenue, will be collected in 2016

$ 65,000

Prepaid rent expense, will be used in 2016

$ 30,000

76. What is Elephant, Inc.s taxable income for 2015?

a. $ 750,000

b. $ 630,000

c. $ 870,000

d. $1,130,000

why choose B

78. The ending balance in Elephant, Incs deferred tax liability at December 31, 2015 is

a. $23,000

b. $38,000

c. $26,000

d. $78,000

why choose B

81. Based on the following information, compute 2015 taxable income for South Co. assuming that its pre-tax accounting income for the year ended December 31, 2015 is $345,000.

Future taxable

Temporary difference (deductible) amount

Installment sales

$288,000

Depreciation

$ 90,000

Unearned rent

($300,000)

a. $423,000

b. $267,000

c. $723,000

d. $333,000

why choose B

82. Fleming Company has the following cumulative taxable temporary differences:

12/31/15 12/31/14

$1,280,000 $1,800,000

The tax rate enacted for 2015 is 40%, while the tax rate enacted for future years is 30%. Taxable income for 2015 is $3,200,000 and there are no permanent differences. Flemings pretax financial income for 2015 is:

a. $1,920,000

b. $2,680,000

c. $3,460,000

d. $4,480,000

why choose B

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