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Use the following information for the next two items Sapphire Corporation's partial income statement for 2018 is as follows: Income before income taxes $1,005,000 Income
Use the following information for the next two items Sapphire Corporation's partial income statement for 2018 is as follows: Income before income taxes $1,005,000 Income tax expense Current $250.000 Deferred 30,000 280,000 Net Income $725 000 Sapphire uses the straight-line method of depreciation for financial reporting purposes and accelerated depreciation for tax purposes. The amount charged to depreciation expense on its books this year was $450,000. No other differences existed between book income and taxable income except for the amount of depreciation. The tax rate is 30%. First Question: What amount was deducted for depreciation on the corporation's tax return for the current year 2018? Select one: O a $450,000 b. $280,000 O c. $350,000 O d. $550,000 Clear my choice Second Question: Assume that Sapphire had a beginning balance of a Deferred Tax Liability (DTL) of $125,000. What is the ending balance of the DTL at the end of 2018? Select one: O a. $95,000 O b. $225,000 O c. $25,000 d. $155,000 Clear my choice
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