Using the facts of Problem 16, determine Prances 2021 deferred tax expense and any deferred tax asset
Question:
Using the facts of Problem 16, determine Prance’s 2021 deferred tax expense and any deferred tax asset or liability. In net present value terms, what has been the value to Prance of accelerating $20,000 of 2021 book depreciation to 2020? Use text Appendix E to calculate your answer.
Data from Problem 16
Prance reports $600,000 of pretax book net income in 2021. Prance’s book depreciation exceeds tax depreciation that year by $20,000. Prance reports no other temporary or permanent book-tax differences. Assuming that the pertinent U.S. tax rate is 21%, compute Prance’s current income tax expense for the year.
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South-Western Federal Taxation 2022 Corporations, Partnerships, Estates And Trusts
ISBN: 9780357519240
45th Edition
Authors: William A. Raabe, James C. Young, Annette Nellen, William H. Hoffman
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