Stone Co. began operations in 2016 and reported $225,000 in income before income taxes for the year. Stone’s 2016 tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone’s tax rate for 2016 was 40%, and the enacted rate for years after 2016 is 35%. In its December 31, 2016, balance sheet, what amount of deferred income tax liability should Stone report? a. $ 8,750 b. $10,000 c. $12,250 d. $14,000
Stone Co. began operations in 2016 and reported $225,000 in income before income taxes for the year. Stone’s 2016 tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone’s tax rate for 2016 was 40%, and the enacted rate for years after 2016 is 35%. In its December 31, 2016, balance sheet, what amount of deferred income tax liability should Stone report? a. $ 8,750 b. $10,000 c. $12,250 d. $14,000
Chapter7: Losses—deductions And Limitations
Section: Chapter Questions
Problem 54P
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Stone Co. began operations in 2016 and reported $225,000 in income before income taxes for the year. Stone’s 2016 tax
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