Question

Ivanhoe Corp.'s 2021 income statement had pretax financial income of $502000 in its first year of operations. Ivanhoe uses an accelerated cost recovery method on its tax return and straight-line depreciation for financial reporting. The differences between the book and tax deductions for depreciation over the five-year life of the assets acquired in 2021, and the enacted tax rates for 2021 to 2025 are as follows:
Book Over (Under) Tax
Tax Rates
2021 $(102000) 25%
2022 (132000) 20%
2023 (32000) 20%
2024 122000 20%
2025 142000 20%
There are no other temporary differences.
Required:
A) In Ivanhoe's December 31, 2021 balance sheet, the noncurrent deferred income tax liability and the income taxes currently payable should be ___________.

Answer 1

Answer:

$20,400 and $100,000

Explanation:

The computation of the non-current deferred income tax liability and the income taxes currently payable is shown below:

The non-current deferred income tax liability is

= $102,000 × 20%

= $20,400

And, the income taxes currently payable is

= ($502,000 - $102,000) × 25%

= $400,000 × 25%

= $100,000

Since we have to determine for the year 2021 so we considered the 2021 amount and tax rate for another year for the first part and for the second amount we take the remaining amount and then multiplied it by the tax rate of 2021