Bens' Corporation paid $12,000 on December 31, 2019, for equipment with a three-year useful life. The equipment
Question:
Bens' Corporation paid $12,000 on December 31, 2019, for equipment with a three-year useful life. The equipment will be depreciated in the amount of $4,000 each year. Bens' took the entire $12,000 as an expense in its tax return in 2019. Assume this is the only timing difference between the firm's books and its tax return. Bens' tax rate is 25%.
REQUIRED
a. What amount of deferred tax liability should appear in Bens' 12/31/2019 balance sheet?
b. Where in the balance sheet should the deferred tax liability appear?
c. What amount of deferred tax liability should appear in Bens' 12/31/2020 balance sheet?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Financial Accounting
ISBN: 9781618533111
6th Edition
Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman
Question Posted: