Concept explainers
Deferred tax liability: Some business activities may create dissimilarity in the amount recorded in the books and the taxable income. These differences create deferred tax liability. For example, Mr.J is a car dealer who sold a car on installment. In actual the sale happened in the current year but the benefits are receivable in the future years. This creates a difference in the books of accounts and the taxable account.
(a)
To determine the amount of deferred tax liability.
(b)
To determine the deferred tax liability and record in the
(c)
To determine the net income for the year 2016.
Want to see the full answer?
Check out a sample textbook solutionChapter 19 Solutions
ACP INTERMEDIATE ACCOUNTING VOL. 1 >C
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education