At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 Accrued warranty costs, estimated to be used in 2013 $74,000 Prepaid rent expense, will be used in 2013 $31,000 Installment sales revenue, to be collected in 2013 $56,000 Operating loss carry forward $71,000 What is the adjustment needed to correct the balance of deferred tax assets for 2012? A. $25,900 DR. B. $30,450 CR. C. $30,450 DR. D. $18,400 DR.
At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included: Interest income from municipal bonds $15,000 Accrued warranty costs, estimated to be used in 2013 $74,000 Prepaid rent expense, will be used in 2013 $31,000 Installment sales revenue, to be collected in 2013 $56,000 Operating loss carry forward $71,000 What is the adjustment needed to correct the balance of deferred tax assets for 2012? A. $25,900 DR. B. $30,450 CR. C. $30,450 DR. D. $18,400 DR.
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
Related questions
Question
100%
At the beginning of 2012, Annie, Inc. has a deferred tax asset of $7,500 and deferred tax liability of $10,500. In 2012, pretax financial income was $826,000 and the tax rate was 35%. Pretax income included:
Interest income from municipal bonds $15,000
Accrued warranty costs, estimated to be used in 2013 $74,000
Prepaid rent expense, will be used in 2013 $31,000
Installment sales revenue, to be collected in 2013 $56,000
Operating loss carry forward $71,000
What is the adjustment needed to correct the balance of deferred tax assets for 2012?
A. $25,900 DR.
B. $30,450 CR.
C. $30,450 DR.
D. $18,400 DR.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you