On December 20, year 3, Sussex Corporation received a condemnation award of $300,000 as compensation for the
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Question:
On December 20, year 3, Sussex Corporation received a condemnation award of $300,000 as compensation for the forced sale of a company plant with a book value of $200,000. In its income tax return for the year ended December 31, year 3, Sussex elected to replace the condemned plant within the allowed replacement period. Accordingly, the $100,000 gain was not reported as taxable income for year 3. Sussex has an enacted income tax rate of 30% for the year3. In its December 31, year 3 balance sheet, what amount should Sussex report as a deferred tax liability on the above gain?
$70,000
$30,000
$20,000
$0
Related Book For
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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