I need help figuring out my temporary differences and when deferred tax assets, liabilities, or tax expenses
Question:
I need help figuring out my temporary differences and when deferred tax assets, liabilities, or tax expenses are created. Also do I need to annualize all of the figures related to 2023 to estimate for the entire year? I can't wrap my head around how to input this.
Provide an analysis of RBI's tax accounts (i.e. deferred tax balances and current and deferred income tax expense) for years ended December 31, 2018 thru December 31, 2022 and year to date through September 30, 2023. Assume that RBI is a U.S. taxpayer, only and has a federal and state blended tax rate for all years of 25%. RBI has always been an accrual basis taxpayer and a C corporation since inception.Historically, RBI has deducted the maximum cost recovery available on its fixed assets. In addition to the above information, other information for RBI is provided as follows:
Pretax Book Income (Loss) by Year | |
2018 | (50,000) |
2019 | 50,000 |
2020 | 100,000 |
2021 | 175,000 |
2022 | 200,000 |
thru 09/30/23 | 220,000 |
Book and Tax EOY Inventory | ||
Book | Tax | |
2018 | 35,000 | 40,000 |
2019 | 42,000 | 50,000 |
2020 | 55,000 | 60,000 |
2021 | 84,000 | 95,000 |
2022 | 96,000 | 105,000 |
thru 09/30/23 | 104,000 | 120,000 |
Allowance for Doubtful Accounts | |
2018 | 7,500 |
2019 | 14,500 |
2020 | 12,500 |
2021 | 17,800 |
2022 | 12,500 |
thru 09/30/23 | 19,500 |
Meals | Entertainment | |
2018 | 4,500 | 7,000 |
2019 | 7,500 | 12,000 |
2020 | 9,500 | 18,000 |
2021 | 11,000 | 26,000 |
2022 | 14,000 | 32,000 |
thru 09/30/23 | 18,000 | 36,000 |
Product Warranty Reserves | |
2018 | 8,600 |
2019 | 12,500 |
2020 | 18,000 |
2021 | 24,000 |
2022 | 30,000 |
thru 09/30/23 | 36,000 |
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson