ABC is a calendar year accrual basis C corporation has $500,000 book income which appropriately includes $40,000 life insurance premiums paid on key employee, $10,000 entertainment expense, $80,000 bad debt expense using the allowance method, and $15,000 accrued employee compensation for the current year. ABC paid the $15,000 accrued employee compensation on February 20 of next year. If actual write-offs of accounts receivable were $100,000, determine ABC's deferred tax provision and indicate whether it is a deferred tax asset or a deferred tax liability for the current year.
ABC is a calendar year accrual basis C corporation has $500,000 book income which appropriately includes $40,000 life insurance premiums paid on key employee, $10,000 entertainment expense, $80,000 bad debt expense using the allowance method, and $15,000 accrued employee compensation for the current year. ABC paid the $15,000 accrued employee compensation on February 20 of next year. If actual write-offs of accounts receivable were $100,000, determine ABC's deferred tax provision and indicate whether it is a deferred tax asset or a deferred tax liability for the current year.
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter12: Corporations: Organization, Capital Structure, And Operating Rules
Section: Chapter Questions
Problem 34P
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ABC is a calendar year accrual basis C corporation has $500,000 book income which appropriately includes $40,000 life insurance premiums paid on key employee, $10,000 entertainment expense, $80,000
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