At December 31, DePaul Corporation had the following cumulative temporary differences associated with its operations: Estimated warranty
Question:
At December 31, DePaul Corporation had the following cumulative temporary differences associated with its operations: Estimated warranty expense, $16 million temporary difference: expense recorded in the year of the sale; tax-deductible when paid (one-year warranty). Depreciation expense, $120 million temporary difference: straight-line in the income statement; MACRS on the tax return. Income from installment sales of properties, $20 million temporary difference: income recorded in the year of the sale; taxable when received equally over the next five years. Rent revenue collected in advance, $24 million temporary difference; taxable in the year collected; recorded as income when the performance obligation is satisfied in the following year. Required: Assuming DePaul will show a single noncurrent net amount in its December 31 balance sheet, indicate that amount and whether it is a net deferred tax asset or liability. The tax rate is 25%.
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson