On December 31, 2018, Big Bear Corporation reports liabilities with a tax basis of $ 800,000...

Transcribed Image Text:

On December 31, 2018, Big Bear Corporation reports liabilities with a tax basis of $ 800,000 and a book basis of $1,100,000. There was no difference in the asset basis. The difference in liability basis arose from temporary differences that would reverse in the following years: 2019 $80,000 2020 $70,000 2021 $72,000 2022 $40,000 2023 $38,000 Assuming a tax rate of 30% for 2018-2021 and a rate of 35% for 2022-2023, what should Big Bear report on its balance sheet on December 31, 2018? On December 31, 2018, Big Bear Corporation reports liabilities with a tax basis of $ 800,000 and a book basis of $1,100,000. There was no difference in the asset basis. The difference in liability basis arose from temporary differences that would reverse in the following years: 2019 $80,000 2020 $70,000 2021 $72,000 2022 $40,000 2023 $38,000 Assuming a tax rate of 30% for 2018-2021 and a rate of 35% for 2022-2023, what should Big Bear report on its balance sheet on December 31, 2018?

Answer rating: 100% (QA)

In this case the temporary differences arise from the discrepancy between the tax basis and book bas... View the full answer