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Exercise 19-16 During 2017, Sweet Co.'s first year of operations, the company reports pretax financial income at $264,400. Sweet's enacted tax rate is 45% for
Exercise 19-16 During 2017, Sweet Co.'s first year of operations, the company reports pretax financial income at $264,400. Sweet's enacted tax rate is 45% for 2017 and 40% for all later years. Sweet expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2017, are summarized as follows Future Years 2018 2019 2020 2021 2022 Total Future taxable (deductible) amounts: Installment sales Depreciation Unearned rent $33,500 $33,500 $33,500 $100,500 5,600 5,600 5,600 $5,600 $5,600 28,000 (49,000) (49,000) (98,000 ) Complete the schedule below to compute deferred taxes at December 31, 2017 Deferred Tax Future Taxable Temporary Difference (Deductible) Amounts Tax Rate (Asset) Liability $100,500 28,000 (98,000) Installment sales Depreciation Unearned rent Totals
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