Explain the concept of deferred taxes

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Question: 1. Sales for the Merry Company totaled $800,000 for the year, COGS is $150,000, G&A Expenses of $200,000 includes depreciation of $30,000, interest expense of $75,000, and patent amortization of $20,000. The Company had a gain on sale of Investments in the amount of $25,000 and income tax expense totaled $100,000 and income tax payable totaled $40,000 for the same period.

1) The Merry Company net income is:

2) Merry Company EBIDA is:

2. Briefly explain the concept of Deferred Taxes. What is the difference between the Deferred Tax Asset Account and the Deferred Tax Liability Account? Prepare the journal entry to record Merry Company deferred taxes for the period.

Reference no: EM131884482

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