In 2022, the enacted tax rate is 25% for all current and future years, and Hynde...

 

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In 2022, the enacted tax rate is 25% for all current and future years, and Hynde Corp., in its first year of operations, reports $536,000 of pretax financial income and $426,000 of taxable income. In 2023, an enacted law changes the tax rate for all current and future years to 20%, and Hynde has $583,000 of pretax financial income and $599,500 of taxable income. All book-tax differences are due to one temporary difference for depreciation. What deferred tax asset (enter as a positive number) or deferred tax liability (enter as a negative number) will Hynde report on its December 31, 2023 balance sheet? In 2022, the enacted tax rate is 25% for all current and future years, and Hynde Corp., in its first year of operations, reports $536,000 of pretax financial income and $426,000 of taxable income. In 2023, an enacted law changes the tax rate for all current and future years to 20%, and Hynde has $583,000 of pretax financial income and $599,500 of taxable income. All book-tax differences are due to one temporary difference for depreciation. What deferred tax asset (enter as a positive number) or deferred tax liability (enter as a negative number) will Hynde report on its December 31, 2023 balance sheet?

Answer rating: 100% (QA)

If the book income exceeds the taxable income then deferred tax liability ... View the full answer