Sh6Please help.me Solution thankyou 2. Elephant, Inc. has an enacted tax rate of 20%. The following items are includedin Elephant's pre-tax income:Interest income from municipal bondsAccrued warranty costs, estimated to be paid next yearExcess tax depreciation over book depreciationPrepaid rent expense, will be used in 2022$120,000$260,000$130,000$60,000a. The ending balance in Elephant, Inc.'s deferred tax asset at December 31,2021 is?b. The ending balance in Elephant, Inc.'s deferred tax liability at December31, 2021 is

A deferred tax LIABILTY or deferred tax ASSET is created when there are temporary differences…

Answered: deferred tax asset a deferred tax…

Business

Accounting

deferred tax asset a deferred tax liability

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 56P

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

Sh6

Please help.me

Solution thankyou

2. Elephant, Inc. has an enacted tax rate of 20%. The following items are included
in Elephant's pre-tax income:
Interest income from municipal bonds
Accrued warranty costs, estimated to be paid next year
Excess tax depreciation over book depreciation
Prepaid rent expense, will be used in 2022
$120,000
$260,000
$130,000
$60,000
a. The ending balance in Elephant, Inc.'s deferred tax asset at December 31,
2021 is?
b. The ending balance in Elephant, Inc.'s deferred tax liability at December
31, 2021 is

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