Question
Isaac Incorporated began operations in January 2024. For some property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for
Isaac Incorporated began operations in January 2024. 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 2024, Isaac had $671 million in sales of this type.
Scheduled collections for these sales are as follows:
2024 $ 82 million
2025 136 million
2026 128 million
2027 161 million
2028 164 million
$ 671 million
Assume that Isaac has a 25% income tax rate and that there were no other differences in income for financial statement and tax purposes.
Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2024 balance sheet? (Rounded)
Multiple Choice:
$576 million
$130 million
$54 million
$147 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