BLUE Company has three financial statement differences for which the December 31, 2020 book bases are different from the December 31, 2020 tax bases Book basis Tax basis Difference Equipment 2,000,000 1,200,000 800,000 Prepaid insurance 750,000 0 750,000 Warranty liability 500,000 0 500,00 The insurance premiums paid during 2020 are considered as non deductible expenses Enacted tax rate is 30 for current and future periods What is the amount of net deferred tax liability to be reported on BLUEs statement of financial position at December 31, 2020

The Answer is in the image, click to view ...

Question: BLUE Company has three financial statement differences for which the December 31, 2020 book bases are different from the December 31, 2020 tax bases: Book

BLUE Company has three financial statement differences for which the December 31, 2020 book bases are different from the December 31, 2020 tax bases:

	Book basis	Tax basis	Difference
Equipment	2,000,000	1,200,000	800,000
Prepaid insurance	750,000	0	750,000
Warranty liability	500,000	0	500,00

The insurance premiums paid during 2020 are considered as non-deductible expenses. Enacted tax rate is 30% for current and future periods. What is the amount of net deferred tax liability to be reported on BLUEs statement of financial position at December 31, 2020?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

inctax jan - Word (Product Activation Failed) ? - FX FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES MAILINGS REVIEW VIEW Sign in & Cut Calibri (Body) * 11 - A A |Aa. A F. 21 1 a Copy AaBbCcDc...

Caleb Corporation has three financial statement elements for which the December 31, 2010 book value is different than the December 31, 2010 tax basis Book value Tax basis Difference Equipment...

Caleb Corporation has three financial statement elements for which the December 31, year 1 book value is different than the December 31, year 1 tax basis. Book value Tax basis Difference Equipment...

Homma Corporation had the following financial statement elements for which the December 31, 2020 carrying amount is different from the December 31, 2020 tax basis: Carrying amount Tax basis Equipment...

Coca-Cola issued their quarterly earnings release (2020 24) this past week which includes the following unaudited 2020 financial statements: (1) an income statement and a cash flows statement for the...

complete only page 1 of the tax form and ecplain the adjustments C-Corporation Tax Return Instructions Purpose: The purpose of this tax return assignment is to apply the tax rules you have learned in...

Because Valuation Allowances are primarily a judgement call this assignment will focus simply on making that decision. We want you to practice flexing some professional judgement. There are a range...

Listen to the following videos and then complete the assignments using the changed numbers on the guidance report. Place your answers on the guidance report. Open the Guidance Report and rework the...

Write a C program such the it calculates the area and circumference of a circle given the radius from the user. The program should prompt the user to input the radius of the circle. Sample output...

Figure shows a simple vapor power cycle operating at steady state with water as the working fluid. Data at key locations are given on the figure. The isentropic efficiency of the turbine is 88%. The...

ProPro Fender , which uses a standard cost system, manufactured 2 0 comma 0 0 0 2 0 , 0 0 0 boat fenders during 2 0 2 4 2 0 2 4 , using 1 4 1 comma 0 0 0 1 4 1 , 0 0 0 square feet of extruded vinyl...

Hypothesis Testing of a Single Mean LCTCS Tuition: Louisiana Community And Technical College System consist of 2 community colleges across the state. I think RPCC's tuition and fees is lower than the...

8. Why do some people in the United States prefer not to talk about history? What views of social reality and intercultural communication does this attitude encourage?

1. Cultural-Group History. This exercise can be done by individual students or in groups. Choose a cultural group in the United States that is unfamiliar to you. Study the history of this group, and...

e. What are notable achievements of the group?