Using the facts of Problem 10, determine the following a The 2017 end of year balance in Prance 's deferred tax asset and deferred tax liability balance sheet accounts b The value to Prance of the accelerated tax deduction for depreciation, considering the time value of money Prance earns an after ...

a Deferred tax asset 0 Deferred tax liability 21000 The beginning balance in ...

Using the facts of Problem 10, determine the following. a. The 2017 end-of-year balance in Prance's deferred

Question:

Using the facts of Problem 10, determine the following.
a. The 2017 end-of-year balance in Prance's deferred tax asset and deferred tax liability accounts.
b. The value to Prance of the accelerated tax deduction for depreciation, considering the time value of money. Prance earns an after-tax rate of return on capital of 8%?
Facts of Problem 10
Prance, in Problem 3, reports $600,000 of pretax book net income in 2017. Prance's book depreciation exceeds tax depreciation that year by $20,000. Prance reports no other temporary or permanent book-tax differences. Assume that the pertinent U.S. tax rate is 35%,
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...