National Tourism Company reported on 31 December, 2018 a pretax financial income of $900,000 which is subject to 40% tax rate. At the beginning of that year, the company had a deferred tax liability of $18,000 and a deferred tax asset of $12,000. During the year, National recorded warranty costs of $156,000 to be paid in 2019 and prepaid advertising expense that will be used in 2019 of $36,000. Also, the company in 2018 received an interest on governmental bonds of $72,000. National reported $114,000 operating losses carryforward and $78,000 of installment sales revenue to be collected in 2019. At December 31, 2018, the company’s accountant reported a taxable income of $714,000 on its tax return. Also, he decreased deferred tax asset by $64,800 and reported deferred tax liability of $31,200. Do you agree with the reported numbers
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National Tourism Company reported on 31 December, 2018 a pretax financial income of $900,000 which is subject to 40% tax rate. At the beginning of that year, the company had a
deferred tax liability of $18,000 and adeferred tax asset of $12,000. During the year, National recorded warranty costs of $156,000 to be paid in 2019 and prepaid advertising expense that will be used in 2019 of $36,000. Also, the company in 2018 received an interest on governmental bonds of $72,000. National reported $114,000 operating losses carryforward and $78,000 of installment sales revenue to be collected in 2019.At December 31, 2018, the company’s accountant reported a taxable income of $714,000 on its tax return. Also, he decreased deferred tax asset by $64,800 and reported deferred tax liability of $31,200. Do you agree with the reported numbers
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