Question
The following facts relate to Waterway Corporation. 1. Deferred tax liability, January 1, 2020, $35,700. 2. Deferred tax asset, January 1, 2020, $11,900. 3.
The following facts relate to Waterway Corporation. 1. Deferred tax liability, January 1, 2020, $35,700. 2. Deferred tax asset, January 1, 2020, $11,900. 3. Taxable income for 2020, $124,950. 4. Cumulative temporary difference at December 31, 2020, giving rise to future taxable amounts, $273,700. 5. Cumulative temporary difference at December 31, 2020, giving rise to future deductible amounts, $113,050. 6. Tax rate for all years, 20%. No permanent differences exist. 7. The company is expected to operate profitably in the future. (a) * Your answer is incorrect. Compute the amount of pretax financial income for 2020. Pretax financial income $ 273700
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