Question
Instructions At December 31, 2019, the Blue Agave Company had a current deferred tax asset of $60,000, arising from cash for magazine subscriptions received
Instructions At December 31, 2019, the Blue Agave Company had a current deferred tax asset of $60,000, arising from cash for magazine subscriptions received and taxed in 2019 but that will be recognized as income for accounting purposes in 2020; a noncurrent deferred tax liability of $160,000 arising from an excess of MACRS tax depreciation over straight-line accounting depreciation of plant assets; and a long-term deferred tax asset of $80,000, arising from contingency expenses for accounting purposes that will be tax deductible when paid (estimated to be in 2021). The 2020 pretax financial income and taxable income for Blue Agave are as follows: Pretax financial income Estimated bad debt expense $800,000 60,000 Magazine subscriptions earned (cash received in 2019) (200,000)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started