Extronic, a calendar year, accrual basis corporation, reported a $41,900 liability for accrued 2018 state income tax on its December 31, 2018, balance sheet. Extronic made the following state income tax payments during 2019. 

On December 27, Extronic’s tax department calculated that the corporation’s actual 2019 state income tax liability was $251,200. Consequently, Extronic accrued a $19,200 liability for state tax payable at year-end. Extronic paid this balance due on March 11, 2020. 

a. If Extronic has not adopted the recurring item exception as its method of accounting for state income tax, compute its 2019 deduction for state income tax. 

b. If Extronic has adopted the recurring item exception as its method of accounting for state income tax, compute its 2019 deduction for state income tax.

Transcribed Image Text:

March 8 Balance due of 2018 tax $41,900 April 14 1st estimate 2019 state tax 58,000 June 12 2nd estimate 2019 state tax 58,000 September 15 3rd estimate 2019 state tax 58,000 December 13 4th estimate 2019 state tax 58,000