Using tax depreciation for tax purposes and straight-line depreciation for financial reporting, do deferred tax liabilities lead to true future cash flow?

Q: In which situation does the tax depreciation allow the firms to defer paying income taxes?

A: Deferment of income tax liability is also called as Deferred Tax Liability. It means tax liability…

Q: cases would affect the current assets portion of the balance sheet

A: First option is wrong because when Current Tax Expense > Tax Payments, there is a current…

Q: What is the depreciation method that is used for tax accounting purposes? How is it different than…

A: Accelerated depreciation method:

Q: Give an example of a cash flow that is not on the income statement. How do you determine the…

A: Cash Flow Statement:   It is a financial statement prepared by a company to report their cash…

Q: Calculate the net profits (after taxes) for the following cash flows. The cash flows have not been…

A: Introduction:- Net income is the amount of profit a obtained by companies after paying all expenses…

Q: Describe the procedures for determining after-tax net cash flows in taxable situations?

A: Net cash flow after tax is an important measure used for the purpose of evaluation of company's…

Q: after tax cash flow

A: Depreciation = Cost of the asset * Rate of recovery Cost of the asset $500,000 Rate of recovery…

Q: How do I calculate and record the related after tax cash flow effect(s)?

A: THE FOLLOWING IS THE ANSWER

Q: Under the principle of cashflow estimation, why it is important that cashflow should be measured on…

A: A cash flow statement determines the net cash inflows and outflows from an organization during a…

Q: Does the management of long term assets benefit the business in anyway? Are there tax benefits as…

A: Assets  is a resource which has economic value and gives benefit to the company directly and…

Q: how can the gain on the sale of invesment be a deduction from net income in determining the cash…

A: Statement of cash flows: Cash flow statement is also known as statement of cash flows. It is a…

Q: What is calculation of before Tax (Equity) Cash Flow?  Please provide example.

A: The cash flow, which is generated by an investment after deducting all payments of all expenses from…

Q: What is the CORRECT statement about Free Cash Flows (FCF): O FCFS are before tax cash flows O FCFS…

A: Free cash flow is money that is freely available for paying the creditors as interest and…

Q: Explain how did it get the value of depreciation, income taxation, NOPAT, and after-tax cash flow in…

A: Capital budgeting is the process through which various investments and capital projects are…

Q: For each statement in parts a to d, give a short answer or indicate True orFalse. a. Which of the…

A: Cash flows are the cash receipts and the payment the organization receives the given period of time.…

Q: Discuss the Depreciation method for tax purposes?

A: Depreciation:   Depreciation refers to the reduction in the monetary value of a fixed asset due to…

Q: Will taxable income (or losses) and capital gain (or loss) be shared in the same proportion that…

A: Taxes paid are reported as operating activities, even taxes related to investing and financing…

Q: Discuss the tax treatment for business and investment expenses.

A: Tax treatments usually explain the procedural computation tax liability of an individual by stating…

Q: Depreciation is needed only for computing income taxes. True or false?

A:

Q: is less Tax on Profit on Sale of Asset and less Operating Costs (revenue and expenses) or (other…

A: Capital Budgeting helps the company to check the viability of the project. It will help the company…

Q: Which of the following items isreported net of related income taxes?a. Gain or loss from…

A:

Q: When an asset is sold at a gain, why is the gain not reported as a cash inflow from operating…

A: Cash Flow Statement: Cash Flow Statement is a fundamental financial statement that renders valuable…

Q: It can be said that the actual cost of an expenditure that is deductible for tax purposes is less…

A: Tax payable is the amount that is to be paid by the tax payer to the tax receivable individual or…

Q: How can we determine the annual depreciation for tax purposes?

A: Depreciation Depreciation refers to a constant reduction in the cost of an asset. There are two ways…

Q: What is depreciation and amortization? What's the difference? It is an accounting concept that has…

A: Depreciation is a charge to account for a reduction in the value of a capital asset arising because…

Q: How does depreciation give tax benefits? What are the advantages of Internal Financing?

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: What is the real return?   Multiple Choice   The after-tax return on assets.   The pre-tax return…

A: Rate of return is the percentage of profit that is earned on an investment.

Q: One of the basic techniques used in evaluating after-tax operating cash flows is to Select one: a.…

A: The Net Income is calculated as the difference of the Revenues and Expenses , while calculating the…

Q: Do you believe that the cash flows from the sale of an investment should also include the tax effect…

A: Cash Flows in any entity's books reflect the inflow and outflow of cash during a specified period

Q: How is the net profit before tax is calculated in the Cash glow

A: Cash Flow statement is an Financial Statement that is a summary of Possible Cash inflows and…

Q: Define tax depreciation methods

A: Tax: Tax can be defined as the compulsory fees charged by the government of the country or the…

Q: Explain the after-tax effect on cash of disposing of assets. Short answer please

A: Cash flows help the management to determine the NPV and evaluate any project based on their NPV.

Q: Which depreciation method is most common for financial reporting? Which depreciation method is most…

A:

Q: What are the benefits of calculating depreciation differently for financial reports and for tax…

A: Depreciation means decline in the estimation of benefit inside its valuable life because of mileage…

Q: Is the income tax expense shown in the income statement same as the income tax paid shown in the…

A: Income tax expense is a tax calculated on the income earned during the given period. It is…

Q: Which of the following is an appropriate method of computing free cash fl ow to the fi rm? A . Add…

A: Free cash flow to the firm is the amount of cash flows from the operational activities of a firm…

Q: Explore and Discuss the challenges of understanding and reporting taxes and cash flows

A: In today's scenario, there are many challenges faced by an organization in modern taxation as well…

Q: Provide a brief explanation of why depreciation of capital assets is considered in determining…

A: Capital assets are those assets which are held by the business for longer period of time.…

Q: When calculating the cash flows from operating activities which of the following statements is true?…

A: Cash flows from operating activities states that how much cash comes into the business and went out…

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.