In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a $7,400 Section 1231 loss on two sales of operating assets. Required: a. Compute KZ's book and taxable income for its first year. b. Using a 21 percent tax rate, compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the year. c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Complete this question by entering your answers in the tabs below. Req A and B Req C and D c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. (Round your intermediate computations and final answer to nearest whole dollar amount.) Amount C. Book income 512,700 C. Tax income 500,800 d. Deferred tax asset $ $
In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a $7,400 Section 1231 loss on two sales of operating assets. Required: a. Compute KZ's book and taxable income for its first year. b. Using a 21 percent tax rate, compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the year. c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. Complete this question by entering your answers in the tabs below. Req A and B Req C and D c. Compute KZ's book and taxable income for its second year. d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. (Round your intermediate computations and final answer to nearest whole dollar amount.) Amount C. Book income 512,700 C. Tax income 500,800 d. Deferred tax asset $ $
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter17: Business Tax Credits And The Alternative Minimum Tax
Section: Chapter Questions
Problem 25P
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In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a $7,400 Section 1231 loss on two sales of operating assets.
* I only need Requirement D to be solved.
Required:
d. Compute KZ's
Transcribed Image Text:In its first year, Firm KZ recognized $427,300 ordinary business income and a $13,590 loss on the sale of an investment
asset. In its second year, Firm KZ recognized $500,800 ordinary business income, a $19,300 Section 1231 gain, and a
$7,400 Section 1231 loss on two sales of operating assets.
Required:
a. Compute KZ's book and taxable income for its first year.
b. Using a 21 percent tax rate, compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last
day of the year.
c. Compute KZ's book and taxable income for its second year.
d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year.
Complete this question by entering your answers in the tabs below.
Req A and B Req C and D
c. Compute KZ's book and taxable income for its second year.
d. Compute KZ's deferred tax asset or liability (identify which) on its balance sheet on the last day of the second year. (Round
your intermediate computations and final answer to nearest whole dollar amount.)
Amount
C.
Book income
C.
Tax income
d. Deferred tax asset
$
512,700
$ 500,800
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