a. Record income tax expense, deferred income taxes, and income taxespayable for 2022, assuming that it is probable that €20,000 of thedeferred tax asset will be realized in full.b. Record income tax expense, deferred income taxes, and income taxespayable for 2022, assuming that it is probable that none of thedeferred tax asset will be realized. E19.12 (LO 1) (Deferred Tax Asset) Callaway SA has a deferred taxasset account with a balance of €150,000 at the end of 2021 due to a singlecumulative temporary difference of €375,000. At the end of 2022, thissame temporary difference has increased to a cumulative amount of€500,000. Taxable income for 2022 is €850,000. The tax rate is 40% for allyears.

Calculation of Temporary difference for 2022: Temporary difference = 500,000 – 375,000 = 125,000

E19.12 (LO 1) (Deferred Tax Asset) Callaway SA has a deferred tax asset account with a balance of €150,000 at the end of 2021 due to a single cumulative temporary difference of €375,000. At the end of 2022, this same temporary difference has increased to a cumulative amount of €500,000. Taxable income for 2022 is €850,000. The tax rate is 40% for all years.

E19.12 (LO 1) (Deferred Tax Asset) Callaway SA has a deferred tax asset account with a balance of €150,000 at the end of 2021 due to a single cumulative temporary difference of €375,000. At the end of 2022, this same temporary difference has increased to a cumulative amount of €500,000. Taxable income for 2022 is €850,000. The tax rate is 40% for all years.

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter14: Taxes On The Financial Statements

Section: Chapter Questions

Problem 20CE

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