11/29/23, 8:55 AM
Question 15 of 100 - Quiz Two
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At the end of 2023, its ±rst year of operations, Indigo Corp. prepared the following reconciliation between pre-tax accounting income
and taxable income:
Pre-tax accounting income
$321000
Estimated lawsuit expense
759000
Instalment sales
(642000)
Taxable income
$438000
The estimated lawsuit expense of $759000 will be deductible in 2025 when it is expected to be paid. The instalment sales will be
realized at $321000 in each of the next two years. The income tax rate is 30% for all years. The deferred tax liability to be recorded is
$35100.
$96300.
$73530.
$192600.
$642000 × 30% =
$192600
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