URGENTLY NEED THE ANSWER FOR THE QUESTION, PLEASE HELP!!!
Prior to 2020. Batman Inc. had no transactions that lead to temporary differences between book and taxable income for years. However, they did pay a reoccurring premium for key-officer life insurance policies of $7000 annually. After the untimely death of their manager, Mr. Robin, they suffered a net operating loss in 2019. Thankfully, they received a $100,000 settlement payment from the insurance company that, after some delays in production, helped them to get back on their feet in 2020. The financial information about the 2018-2022 income (historical & expected future) and tax rates is presented below. Year Taxable Income (Loss) 80,000 Tax Rate 2018 .40 2019 (170,000) .45 .30 40 2020 expect 110,000 2021 expect 80.000 2022 expect 100,000 *No future changes in tax rates are known as of 2022 40 ** Responses to this question set should not affect your prior answers. You should consider this to be an alternate assumption for years 2020 and beyond." Assume that, in addition to the NOL carryforward effects and tax rates described in the previous table, in 2020 Batman Inc. hires an expert consultant, Alfred Pennyworth, to help institute some changes in business practices which lead to some differences between taxable and pretax income including the purchase of a new bat-shaped spotlight used to alert employees that it's time to get to work. The spotlight was purchased 1/1/2020. Beginning in 2020 it will be depreciated on a straight fine basis over 5 years with zero residual value for financial purposes, and a MACRS will be used to allocate deductions over 4 years as follows: 33%, 40%, 18%, and 9%. An excerpt from Batman Inc. 2020 Balance Sheet has also been provided: 12/31/20 Balance Current Assets $25.000 Prepaid Advertising Expense Deferred Tax Asset - Current 7222 Non Current Assets Deferred Tax Asset - Non Current Accounts Receivable 5.000 ???? Bat Signal Spotlight Accumulated Depr. - Spotlight 9.500 (1.900) Current Liabilities Accrued Liabilities $2.000 7.000 ???? Advances from customers Deferred Tax Liability. Current Non Current Assets Deferred Tax Liability - Non-Current ???? Pennyworth has asked you, a fellow accounting superhero, to review and organize the data, and prepare the tax expense journal entry that would be required in 2020 for Batman, Inc. Specifically, Pennyworth would like to know the following: 1. What is the tax expense in 2020? 2. What is the increase to the current DTA in 20207 3. What is the increase to the non-current DTA in 20207 4. What is the increase in the current DTL in 2020 5. What is the increase to the non current DTL in 20202 6. What is pre-tax income for 2020? Prior to 2020. Batman Inc. had no transactions that lead to temporary differences between book and taxable income for years. However, they did pay a reoccurring premium for key-officer life insurance policies of $7000 annually. After the untimely death of their manager, Mr. Robin, they suffered a net operating loss in 2019. Thankfully, they received a $100,000 settlement payment from the insurance company that, after some delays in production, helped them to get back on their feet in 2020. The financial information about the 2018-2022 income (historical & expected future) and tax rates is presented below. Year Taxable Income (Loss) 80,000 Tax Rate 2018 .40 2019 (170,000) .45 .30 40 2020 expect 110,000 2021 expect 80.000 2022 expect 100,000 *No future changes in tax rates are known as of 2022 40 ** Responses to this question set should not affect your prior answers. You should consider this to be an alternate assumption for years 2020 and beyond." Assume that, in addition to the NOL carryforward effects and tax rates described in the previous table, in 2020 Batman Inc. hires an expert consultant, Alfred Pennyworth, to help institute some changes in business practices which lead to some differences between taxable and pretax income including the purchase of a new bat-shaped spotlight used to alert employees that it's time to get to work. The spotlight was purchased 1/1/2020. Beginning in 2020 it will be depreciated on a straight fine basis over 5 years with zero residual value for financial purposes, and a MACRS will be used to allocate deductions over 4 years as follows: 33%, 40%, 18%, and 9%. An excerpt from Batman Inc. 2020 Balance Sheet has also been provided: 12/31/20 Balance Current Assets $25.000 Prepaid Advertising Expense Deferred Tax Asset - Current 7222 Non Current Assets Deferred Tax Asset - Non Current Accounts Receivable 5.000 ???? Bat Signal Spotlight Accumulated Depr. - Spotlight 9.500 (1.900) Current Liabilities Accrued Liabilities $2.000 7.000 ???? Advances from customers Deferred Tax Liability. Current Non Current Assets Deferred Tax Liability - Non-Current ???? Pennyworth has asked you, a fellow accounting superhero, to review and organize the data, and prepare the tax expense journal entry that would be required in 2020 for Batman, Inc. Specifically, Pennyworth would like to know the following: 1. What is the tax expense in 2020? 2. What is the increase to the current DTA in 20207 3. What is the increase to the non-current DTA in 20207 4. What is the increase in the current DTL in 2020 5. What is the increase to the non current DTL in 20202 6. What is pre-tax income for 2020
