June 30, 2015, Patya Co. prepaid a 1,000,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in the 2015 cash basis tax return. The accrual basis income statement will report a 500,000 insurance expense in 2015 and 2016. The income tax rate is 30%. On Dec. 31, 2015, what amount should be reported as deferred tax liability?
June 30, 2015, Patya Co. prepaid a 1,000,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in the 2015 cash basis tax return. The accrual basis income statement will report a 500,000 insurance expense in 2015 and 2016. The income tax rate is 30%. On Dec. 31, 2015, what amount should be reported as deferred tax liability?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 14P
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On June 30, 2015, Patya Co. prepaid a 1,000,000 premium on an annual insurance policy. The premium payment was a tax deductible expense in the 2015 cash basis tax return. The accrual basis income statement will report a 500,000 insurance expense in 2015 and 2016. The income tax rate is 30%.
On Dec. 31, 2015, what amount should be reported as
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