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For calendar year 2010, Kane Corp reported depreciation of $1,200,000 in its income statement. On its 2010 income tax return, Kane reported depreciation of $1,800,000.
For calendar year 2010, Kane Corp reported depreciation of $1,200,000 in its income statement. On its 2010 income tax return, Kane reported depreciation of $1,800,000. Kane's income statement also included $225,000. accrued warranty expense that will be deducted for tax purposes when paid. Kane's enacted tax rates are 30% for 2010 and 2011, and 24% for 2012 and 2013. The depreciation difference and warranty expense will reverse over the next three years as follows: Dep. Dif. Warranty expense 2011 $240,000. $45,000. 2012 210,000. 75,000. 2013 150,000. 105,000. These were the only temporary differences. In Kane's 2010 income statement, the deferred portion of its provision for income taxes should be: a) $200,000. b) 112,500. c) 101,700. d) 109,800
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