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yawa3891 [41]
3 years ago
8

In 2018, Krause Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $

3,600,000. The facilities were sold in March 2019 and a $3,600,000 loss was recognized for tax purposes. Also in 2018, Krause paid $150,000 in premiums for a two-year life insurance policy in which the company was the beneficiary (Note: payment of premiums on a life insurance policy is a permanent difference. It is not recognized for tax purposes). Assuming that the enacted tax rate is 30% in both 2018 and 2019, and that Krause paid $1,170,000 in income taxes in 2018, the amount reported as net deferred income taxes on Krause's balance sheet at December 31, 2018, should be a
Business
1 answer:
pashok25 [27]3 years ago
6 0

Answer:

$1,080,000 asset

Explanation:

Net deferred income taxes = Unused plant facilities disposed * Tax rate = $3,600,000 * 30% = $1,080,000 asset

Therefore, $1,080,000 should be reported as net deferred income taxes on Krause's balance sheet at December 31, 2018.

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