SM4 Blossom, Inc. had pre-tax accounting income of $2500000 and a tax rate of 20% in 2025, its first year of operations. In 2025,the company had the following transactions:Received rent from Nancy, Co. for 2026Municipal bond incomeDepreciation for tax purposes in excess of book depreciationInstallment sales profit to be taxed in 2026AccountWhich of the following deferred tax accounts and balances would Blossom report at December 31, 2025?Deferred Tax LiabilityDeferred Tax AssetDeferred Tax AssetDeferred Tax LiabilityBalance$30400$18800$30400$9400011800058000$18800160000

The temporary discrepancies between book and tax revenue are multiplied by the relevant tax rate to…

Which of the following deferred tax accounts and balances would Blossom report at December 31, 2025? Account Deferred Tax Liability Deferred Tax Asset Deferred Tax Asset Deferred Tax Liability Balance $30400 $18800 $30400 $18800

Which of the following deferred tax accounts and balances would Blossom report at December 31, 2025? Account Deferred Tax Liability Deferred Tax Asset Deferred Tax Asset Deferred Tax Liability Balance $30400 $18800 $30400 $18800

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 3RE: In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During...

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Concept explainers

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.

Question

SM4

Blossom, Inc. had pre-tax accounting income of $2500000 and a tax rate of 20% in 2025, its first year of operations. In 2025,
the company had the following transactions:
Received rent from Nancy, Co. for 2026
Municipal bond income
Depreciation for tax purposes in excess of book depreciation
Installment sales profit to be taxed in 2026
Account
Which of the following deferred tax accounts and balances would Blossom report at December 31, 2025?
Deferred Tax Liability
Deferred Tax Asset
Deferred Tax Asset
Deferred Tax Liability
Balance
$30400
$18800
$30400
$94000
118000
58000
$18800
160000

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