Question

At December 31, 2010, Cascade Company had the following deferred tax items.
Resulting Balances
Temporary Differences in Deferred Taxes
1. Excess of tax depreciation over book depreciation ......................................$200,000
2. Accrual, for book purposes, of estimated loss contingency from pending
lawsuit that is expected to be settled in 2011. The loss will be deducted
on the tax return when aid.............................................................................. (50,000)
3. Accrual method used for book purposes and installment method used for
tax purposes for an isolated installment sale of an investment.......................300,000
In analyzing the temporary differences, you find that $30,000 of the depreciation temporary difference will reverse in 2011, and $120,000 of the temporary difference due to the installment sale will reverse in 2011. The tax rate for all years is 40%.

Instructions
Indicate the manner in which deferred taxes should be presented on Cascade Company’s December 31, 2010, statement of financial position.



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  • CreatedJune 17, 2013
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