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Owaddagu Siam Corporation is an accrual-based business that uses the calendar year as its fiscal year. The company has net income before tax of $265,000.
Owaddagu Siam Corporation is an accrual-based business that uses the calendar year as its fiscal year. The company has net income before tax of $265,000. For each scenario, state (1) whether the book-tax difference is permanent or temporary, (2) how much income or deduction thecompany should recognize for tax purposes in 2014, (3) the amount of any book-tax difference (4) whether it created a net deferred tax asset/reduced a tax deferred liability (+DTA/DTL)or created a net deferred tax liability/reduced a deferred tax asset (+DTL/DTA). At the end of 2014, Owaddagu Siam Corporation accrued for book purposes $75,000 of warranty costs related to 2014 sales. As of March 15, 2015, the company incurred $20,000 of warranty costs related to 2014 sales. As of September 15, 2015, the company incurred $65,000 of warranty costs related to 2014 sales. By the end of 2015, the company incurred $80,000 of warranty costs related to 2014 sales. At the end of 2013, Owaddagu Siam Corporation accrued for book purposes $50,000 of warranty costs related to 2013 sales. As of March 15, 2014, the company incurred $10,000 of warranty costs related to 2013 sales. As of September 15, 2014, the company incurred $25,000 of warranty costs related to 2013 sales. By the end of 2014, the company incurred $50,000 of warranty costs related to 2013 sales
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