Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21%

Kantner, Inc., is a domestic corporation with the following balance sheet for book and tax purposes at the end of the year. Assume a 21% Federal corporate tax rate and no valuation allowance.

Tax Debit/(Credit) Book Debit/(Credit)
Assets
Cash $1,000 $1,000
Accounts receivable 9,000 9,000
Buildings 850,000 850,000
Accumulated depreciation (700,000) (620,000)
Furniture and fixtures 40,000 40,000
Accumulated depreciation (10,000) (8,000)
Total assets $190,000 $272,000
Liabilities
Accrued warranty expense $0 ($40,000)
Note payable (16,000) (16,000)
Total liabilities ($16,000) ($56,000)
Stockholders' Equity
Paid-in capital ($50,000) ($50,000)
Retained earnings (124,000) (166,000)
Total liabilities and stockholders' equity ($190,000) ($272,000)

The beginning of the year book-tax basis difference for the deferred tax liabilities are listed below. Complete the table and determine the change in Kantner's deferred tax liabilities for the current year.

Beginning of Year Current-Year Difference End of Year
Buildingaccumulated depreciation ($62,000) $ $
Furniture and fixtures
accumulated depreciation (400) $ $
Subtotal ($62,400) $ $
Applicable tax rate 21% 21% 21%
Gross deferred tax liability ($13,104) $
Change in deferred tax liability $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Version 3.1

Authors: Joe Ben Hoyle, C.J. Skender, Leah Kratz

1st Edition

1453339442, 9781453339442

More Books

Students also viewed these Accounting questions