Reference no: EM133179584

Questions -

A) Cooke City Company reported the following results for the year ended December 31, 2020, its first year of operations: 2020

Income (per books before income taxes) $4,600,000

Taxable income 5,200,000

The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2021. What should Cooke City record as a net deferred tax asset or liability for the year ended December 31, 2020, assuming that the enacted tax rates in effect are 40% in 2020 and 35% in 2021?

B) In 2020, Coram Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $8,900,000. The facilities were sold in March 2021 and a $8,900,000 loss was recognized for tax purposes. Also in 2020, Coram paid $250,000 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 30% in both 2020 and 2021, and that Coram paid $3,460,000 in income taxes in 2020, the amount reported as net deferred income taxes on Coram's balance sheet at December 31, 2020, should be a?

C) Corbin Corporation has a deferred tax asset at December 31, 2019 of $300,000 due to the recognition of potential tax benefits of an operating loss carryforward. The enacted tax rates are as follows: 40% for 2016-2018; 35% for 2019; and 30% for 2020 and thereafter. Assuming that management expects that only 75% of the related benefits will actually be realized, a valuation account should be established in the amount of?

D) Corvallis Company sells household furniture. Customers who purchase furniture on the installment basis make payments in equal monthly installments over a two-year period, with no down payment required. Corvallis's gross profit on installment sales equals 40% of the selling price of the furniture. For financial accounting purposes, sales revenue is recognized at the time the sale is made. For income tax purposes, however, the installment method is used. There are no other book and income tax accounting differences, and Corvallis's income tax rate is 25%. If Corvallis's December 31, 2020, balance sheet includes a deferred tax liability of $1,000,000 arising from the difference between book and tax treatment of the installment sales, it should also include installment accounts receivable of?