As a result of differences between depreciation for financial reporting purposes and tax purposes, the financial reporting basis of Noor Co.’s sole depreciation asset, acquired in 20x1, exceeded its tax basis by P250,000 at December 31, 20x1. This difference will reverse in future years. The enacted tax rate is 30% for 20x1, and 40% for future years. Noor has no other temporary differences. In its December 31, 2001, balance sheet, how should Noor report the deferred tax effect of this difference - Asset (Liability)? a. 75,000 b. (100,000) c. 100,000 d. (75,000)
As a result of differences between depreciation for financial reporting purposes and tax purposes, the financial reporting basis of Noor Co.’s sole depreciation asset, acquired in 20x1, exceeded its tax basis by P250,000 at December 31, 20x1. This difference will reverse in future years. The enacted tax rate is 30% for 20x1, and 40% for future years. Noor has no other temporary differences. In its December 31, 2001, balance sheet, how should Noor report the deferred tax effect of this difference - Asset (Liability)? a. 75,000 b. (100,000) c. 100,000 d. (75,000)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...
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As a result of differences between depreciation for financial reporting purposes and tax purposes, the financial reporting basis of Noor Co.’s sole depreciation asset, acquired in 20x1, exceeded its tax basis by P250,000 at December 31, 20x1. This difference will reverse in future years. The enacted tax rate is 30% for 20x1, and 40% for future years. Noor has no other temporary differences. In its December 31, 2001, balance sheet, how should Noor report the deferred tax effect of this difference - Asset (Liability)?
a. 75,000
b. (100,000)
c. 100,000
d. (75,000)
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