Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cell Image Corp, reported a deferred tax liability of $153,000 in 20X5. caused by equipment with a UCC of $1.530,000 and net book value of

image text in transcribed
image text in transcribed
image text in transcribed
Cell Image Corp, reported a deferred tax liability of $153,000 in 20X5. caused by equipment with a UCC of $1.530,000 and net book value of $2,040,000. The tax rate was 30%. In 20X6, accounting earnings were $410,000, depreciation expense was $180,000, and CCA was $260,000. The tax rate is 10% Required: 1. Calculate tax payable. Income tax payable 2. Calculate the tax basis of the equipment (Enter your answers in thousands.) Tax basis 3. Calculate the accounting basis of the equipment. (Enter your answers in thousands.) Accounting basis 4. Calculate the amount of the deferred income tax adjustment (Enter your answers in thousands. Round your answer to 1 decimal places.) Deferred income tax adjustment 5. Calculate the amount of the adjustment in requirement 4 that was caused by the (a) change in the tax rate and new temporary difference (Amounts to be deducted should be indicated with a minus sign.) a. Change in the tax rate b. New temporary difference 6. Calculate tax expense for 20x6. Tax expense

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Leading The Internal Audit Function

Authors: Lynn Fountain

1st Edition

0367568004, 9780367568009

More Books

Students also viewed these Accounting questions

Question

=+Why were they effective? How could you continue the campaign?

Answered: 1 week ago

Question

=+Who's your primary audience?

Answered: 1 week ago

Question

=+What do they need to hear?

Answered: 1 week ago