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What should be the balance in the dta account

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Reference no: EM132960758

Flake Co. had taxable income for 2022 of $300,000. Included in the computation of taxable income was consideration of the following:

  • $36,000 excess of rent expense over rent paid for 2022
  • $10,000 in municipal bond interest received
  • $18,000 unearned revenue recorded for financial purposes in 2022; $7,000 was realized in 2022
  • $12,000 advertising expense paid in 2022 for ads run in 2022
  • 4-year insurance policy of $56,000 paid on Jan. 1, 2022 for coverage starting 1/1/22
  • $25,000 of sales on account during 2022 that remains uncollected

Flake's tax rate for 2022 was 25%. The 1/1/22 balance in non-current deferred tax asset was $7,300 and the balance in the non-current deferred tax liability account was $20,000.

Problem a. What was Flake's financial income at 12/31/2022?

Problem b. Assuming all DTA situations are non-current, what should be the balance in the DTA account at 12/31/2022?

Problem c. Assuming all DTL situations are non-current, what should be the balance in the DTL account at 12/31/2022?

Reference no: EM132960758

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