Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for
Isaac Inc. began operations in January 2021. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2021, Isaac had $712 million in sales of this type. Scheduled collections for these sales are as follows: 2021 2022 $ 67 million 147 million 2023 146 million 2024 174 million 2025 178 million $712 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2022, legislation revised the income tax rates so that Isaac would be taxed in 2023 and beyond at 25%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2022, what deferred tax liability would Isaac report in its year-end 2022 balance sheet? (Round your answer to the nearest whole million.) Multiple Choice $153 million. $263 million. $128 million. $125 million
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