On January 1, 2023, Sarasota Corp., a publicly accountable enterprise, purchased 40% of the common shares...

 

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On January 1, 2023, Sarasota Corp., a publicly accountable enterprise, purchased 40% of the common shares of Marigold Inc. and accounts for this investment by the equity method. During 2023, Marigold reported earnings of $906000 and paid dividends of $302000. Assume that these dividends are taxable to Sarasota when received. Sarasota assumes that all of Marigold's undistributed earnings will be distributed as dividends in future periods when the enacted tax rate will be 20%. Sarasota's current income tax rate is 25%. The increase in Sarasota's deferred tax liability for this temporary difference is On January 1, 2023, Sarasota Corp., a publicly accountable enterprise, purchased 40% of the common shares of Marigold Inc. and accounts for this investment by the equity method. During 2023, Marigold reported earnings of $906000 and paid dividends of $302000. Assume that these dividends are taxable to Sarasota when received. Sarasota assumes that all of Marigold's undistributed earnings will be distributed as dividends in future periods when the enacted tax rate will be 20%. Sarasota's current income tax rate is 25%. The increase in Sarasota's deferred tax liability for this temporary difference is

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