Question
Suppose that on the first day of the next fiscal year, the federal statutory tax rate changed from 35% to 21%. What journal entry related
Suppose that on the first day of the next fiscal year, the federal statutory tax rate changed from 35% to 21%. What journal entry related to the net deferred tax asset would ZAGG record? You may assume that the state statutory tax rate will not change. [Hint: when income tax rates change, companies must re-value their deferred income tax assets and liabilities.]
Income Tax Provision |
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Net Deferred Tax Asset |
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Federal Statutory Rate Change |
K. On June 21, 2016, ZAAG acquired iFrogz for $96.2 million. The excess of the acquisition price over the fair value of iFrogz's net assets (ie, tangible assets and identifiable intangible assets, net of assumed liabilities) was $6.925 million, which was recorded as "Goodwill" at the time of the acquisition.
a. For book purposes, goodwill is tested annually for impairment. In Note 7, ZAGG discloses that it conducted a goodwill impairment analysis during the fourth quarter of 2017. What was the amount of the impairment in goodwill that resulted from this analysis in 2017?
(7) GOODWILL \& INTANGIBLE ASSETS Impairment of Goodwill and Intangible Assets For the year ended December 31, 2017, the Company recorded an impairment of goodwill in the amount of $5,441 for its iFrogz reporting unit within the iFrogz operating segment when it was determined that the carrying value of goodwill exceeded its fair value, which was determined during an impairment analysis performed during the fourth quarter of 2017. In conjunction with the impairment test, the Company considered factors such as the overall decline in the market price of the company's stock and decline in market capitalization for a sustained period as indicators for potential goodwill impairment. In determining the amount of impairment within the analysis, we considered both the income approach, utilizing a discounted cash flow analysis, and market approach, which considers what other purchasers and sellers in the market have paid for companies reasonably similar to the reporting unit. The goodwill impairment of $5,441 is included as a component of impairment of goodwill and intangibles in the consolidated statement of operations. The changes in the carrying amount of goodwill for the year ended December 31,2017 and 2016 , are as follows: The components of income tax (provision) benefit for the years ended December 31,2017,2016 and 2015 , are: The following is a reconciliation of the income taxes computed using the federal statutory rate to the provision for income taxes for the years ended December 31,2017,2016 and 2015: The tax effects of temporary differences that gave rise to significant portions of deferred tax assets and liabilities at December 31,2017 and 2016 , are as follows
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