A Company reports revenues, for financial reporting purpose, equal to $100,000, which includes $10,000 of revenue uncollected.
Question:
A Company reports revenues, for financial reporting purpose, equal to $100,000, which includes $10,000 of revenue uncollected. Therefore, for tax purpose, the company reports revenue equal to $90,000 ($100,000-$10,000). The company also reports expenses for both financial reporting purpose and tax purpose equal to $60,000.
Assuming statutory tax rate is 35%.
a. How much is "income taxes paid"? 10,500
c. The amount of the deferred tax asset/liability created is ____________
d. Income tax expense is calculated as _____________________
e. Effective tax rate is equal to (use percentage) __________________
Please explain how to get the answers (or post work) for c,d,e so I can understand. Thank you.
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon