What should be the balance in kents deferred tax liability

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Reference no: EM13574353

1. Panther Co. had a warranty liability of $345,000 at the beginning of 2013 and $309,000 at the end of 2013. Warranty expense is based on 3% of sales, which were $44 million for the year. What were the warranty expenditures for 2013?

a. $0

b. $1,320,000

c. $1,284,000

d. $1,356,000

2. On February 1, 2012, Pat Weaver Inc. (PWI) issued 8%, $1,900,000 bonds for $2,200,000. PWI retired all of these bonds on January 1, 2013, at 103. Unamortized bond premium on that date was $195,700. How much gain or loss should be recognized on this bond retirement?

a. $152,000 gain.

b. $138,700 gain.

c. $176,000 gain.

d. $0 gain.

3. N Corp. entered into a nine-year capital lease on a warehouse on December 31, 2013. Lease payments of $31,000, which includes real estate taxes of $1,200, are due annually, beginning on December 31, 2014, and every December 31 thereafter. N Corp. does not know the interest rate implicit in the lease; N's incremental borrowing rate is 12%. The rounded present value of an ordinary annuity for nine years at 12% is 5. What amount should N report as capitalized lease liability at December 31, 2013?

a. $155,000

b. $279,000

c. $268,200

d. $149,000

4. Information for Kent Corp. for the year 2013:

Reconciliation of pretax accounting income and taxable income:

Pretax accounting income	$180,400
Permanent differences	(15,700)
	164,700
Temporary difference-depreciation	(13,100)
Taxable income	$151,600

Cumulative future taxable amounts all from depreciation temporary differences:
As of December 31, 2012 $13,600
As of December 31, 2013 $26,700

The enacted tax rate was 28% for 2012 and thereafter.

What should be the balance in Kent's deferred tax liability account as of December 31, 2013?

a. $5,168

b. $7,476

c. $26,700

d. None of the above is correct.

Reference no: EM13574353

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