Determine the amount reported as a deferred tax liability

Assignment Help Financial Accounting
Reference no: EM132517891

Deferred tax liability, change in tax rate, prepare section of income statement

  • Novotna Inc's only temporary difference at the beginning and end of 2016 is caused by a $3 million deferred gain for tax purposes for an installment sale of a plant asset, and the related receivable (only one-half of which is classified as a current asset) is due in equal installments in 2017 and 2018. The related deferred tax liability at the beginning of the year is $1,200,000. In the third quarter of 2016, a new tax rate of 34% is enacted into law and is scheduled to become effective for 2018. Taxable income for 2016 is $5,000,000, and taxable income is expected in all future years.

Instructions:

Question a) Determine the amount reported as a deferred tax liability at the end of 2016. Indicate proper classification(s).

Question b) Prepare the journal entry (if any) necessary to adjust the deferred tax liability when the new tax rate is enacted into law.

Question c) Draft the income tax expense portion of the income statement for 2016. Begin with the line "Income before income taxes." Assume no permanent difference exist

Reference no: EM132517891

Questions Cloud

Having a base paper based on small signal stability analysis : Having a base paper based on small signal stability analysis and the solution for reduced oscillations due to PV penetration in microgrids
Authentication system in demilitarized zone : What happens when we place the authentication system in our demilitarized zone (DMZ)-that is, in the layer closest to the Internet?
Machine learning is improving work in business : Based on How Machine Learning Is Improving Work in Business, Discuss the opportunities of improving human resource management.
What is the amount of each coupon payment : The bond matures in seven years, has a face value of $1,000, and pays semiannual interest payments. What is the amount of each coupon payment?
Determine the amount reported as a deferred tax liability : Prepare the journal entry (if any) necessary to adjust the deferred tax liability when the new tax rate is enacted into law. Determine the amount reported
Digital forensic definition : By searching the internet for Digital Forensic Definition, provide a definition of Digital Forensics.
Prepare record the two journal entries cmk would make : Prepare Record the two journal entries CMK would make at the time of sale. Sold $60,000 of inventory to VNN, Inc. for $90,000 at 2/10, net 30.
What is the total return that fred has earned on investment : Fred has decided to sell all of his shares. What is the total return that Fred has earned on this investment if he received a special dividend of $5 per share?
What is the main message of the asic statement : What is the main message of the ASIC statement? write down the value of its goodwill and brand name intangible assets by $515 million

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd