Errol Toys, Inc. recorded book income of $240,000 in 2020. It does not have any permanent differences,
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Errol Toys, Inc. recorded book income of $240,000 in 2020. It does not have any permanent differences, and the only temporary difference relates to a $12,000 warranty expense that it recorded for book purposes. Errol Toys anticipates fulfilling half of the warranties in the following year and then the rest equally over the next 2 years. The current enacted tax rate is 40%. The enacted tax rates for the following 3 years are 32%, 25%, and 25%, respectively. What deferred tax amount should Errol Toys record for this temporary difference?
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Related Book For
Intermediate Accounting
ISBN: 9780136946694
3rd Edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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