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mote1985 [20]
3 years ago
10

As a result of differences between depreciation for financial reporting purposes and tax purposes, the financial reporting basis

of Noor Co.’s sole depreciable asset acquired in the current year exceeded its tax basis by $250,000 at December 31. This difference will reverse in future years. The enacted tax rate is 30% for the current year and 40% for future years. Noor has no other temporary differences. In its December 31 balance sheet, how should Noor report the deferred tax effect of this difference?
Business
1 answer:
Verizon [17]3 years ago
8 0

Answer:

Deferred tax liability = $52,500

Explanation:

Difference between depreciation for financial reporting purposes and tax purposes at December 31 = 250,000

Enacted tax rate = 30%

Tax rate for future years = 40%

so Deferred tax liability = $250,000 x 40% = $100,000

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3 years ago
A municipal bond has yield to maturity of 4.83 percent. An investor with a marginal tax rate of 35 percent is indifferent betwee
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The yield to maturity of the corporate bond is 7.43%

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