Dario Corp. is a publicly accountable entity with a December 31 year end. The deferred income tax asset account as at December 31, 2020, was based on two temporary differences: ● net book value of property, plant, and equipment of $5,600,000 versus undepreciated capital cost (UCC) of $6,100,000 ● a warranty liability of $350,000 Data for 2021 are as follows: 350,000 1,450,000 Depreciation expense Capital cost allowance Warranty expense Warranty costs incurred 150,000 165,000 130,000 Expenses included in the calculation of net income before taxes but which will only be deductible in 2022 There were NO additions to property, plant, and equipment during the year. The income tax rate in effect at December 31, 2020, was 30%. The 2021 income tax rate was enacted on July 2, 2021, and is 28%. The 2022 income tax rate was enacted on December 31, 2021, and is 25%. Required: Calculate the deferred portion of income tax expense for the year ended December 31, 2021.
Dario Corp. is a publicly accountable entity with a December 31 year end. The deferred income tax asset account as at December 31, 2020, was based on two temporary differences: ● net book value of property, plant, and equipment of $5,600,000 versus undepreciated capital cost (UCC) of $6,100,000 ● a warranty liability of $350,000 Data for 2021 are as follows: 350,000 1,450,000 Depreciation expense Capital cost allowance Warranty expense Warranty costs incurred 150,000 165,000 130,000 Expenses included in the calculation of net income before taxes but which will only be deductible in 2022 There were NO additions to property, plant, and equipment during the year. The income tax rate in effect at December 31, 2020, was 30%. The 2021 income tax rate was enacted on July 2, 2021, and is 28%. The 2022 income tax rate was enacted on December 31, 2021, and is 25%. Required: Calculate the deferred portion of income tax expense for the year ended December 31, 2021.
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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Dario Corp. is a publicly accountable entity with a December 31 year end. The deferred
income tax asset account as at December 31, 2020, was based on two temporary
differences:
UD
net book value of property, plant, and equipment of $5,600,000 versus
undepreciated capital cost (UCC) of $6,100,000
● a warranty liability of $350,000
Data for 2021 are as follows:
350,000
Depreciation expense
Capital cost allowand
Warranty expense
Warranty costs incurred
1,450,000
150,000
165,000
130,000
Expenses included in the calculation of net income before taxes but
which will only be deductible in 2022
There were NO additions to property, plant, and equipment during the year.
The income tax rate in effect at December 31, 2020, was 30%. The 2021 income tax
rate was enacted on July 2, 2021, and is 28%. The 2022 income tax rate was enacted
on December 31, 2021, and is 25%.
TOR
Required:
Calculate the deferred portion of income tax expense for the year ended
December 31, 2021.
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