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Multiple Choice Question 77 At the beginning of 2018; Crane, Inc. had a deferred tax asset of $14000 and a deferred tax liability of $24000.
Multiple Choice Question 77
At the beginning of 2018; Crane, Inc. had a deferred tax asset of $14000 and a deferred tax liability of $24000. Pre-tax accounting income for 2018 was $1380000 and the enacted tax rate is 40%. The following items are included in Cranes pre-tax income:
Interest income from municipal bonds | $108000 |
Accrued warranty costs, estimated to be paid in 2019 | $248000 |
Operating loss carryforward | $178000 |
Installment sales profit, will be taxed in 2019 | $118000 |
Prepaid rent expense, will be used in 2019 | $54000 |
Which of the following is required to adjust Crane, Inc.s deferred tax asset to its correct balance at December 31, 2018?
| A credit of $99200 |
| A credit of $79600 |
| A debit of $85200 |
| A debit of $79600 |
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