GAAP pretax1,000,0001,200,0001,500,000tax expense355,500 tax payable muni bond-100,000-100,000-100,000deferred tax liability deferred tax assets17,000 installment sales - GAAP300,00000 installment sales - Tax200,00050,00050,000tax expense385,000 difference-100,00050,00050,000tax payable deferred tax liability17,500 warranty costs - GAAP-80,00000deferred tax assets warranty costs - tax-30,000-40,000-10,000 difference50,000-40,000-10,000tax expense420,000 tax payable Tax pretax850,0001,110,0001,440,000deferred tax liability15,000 deferred tax assets expected tax rate40%35%30% actual tax rate40%35%30%
CDTA 12/31/200117,00012/31/2001 340,00014,000 12/31/2002 32,5003,000 12/31/2003 0ending balance 12/31/03 12/31/2002DTL 388,50032,500 12/31/2001 17,50012/31/2002 14,00015,00012/31/2003 12/31/20030ending balance 12/31/03 432,000 because tax rate changes were expected/anticipated: 3,000we didn't have to "back into" the adjusting entry for DTA & DTL The "plan" we created in 2001 was simply followed through regarding the DTA
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