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NISA [10]
3 years ago
8

Scott Corp. received cash of $20,000 that was included in revenues in its Year 1 financial statements, of which $12,000 will not

be taxable until Year 2. Scott’s enacted tax rate is 30% for Year 1, and 25% for Year 2. What amount should Scott report in its Year 1 balance sheet for deferred income tax liability?
Business
1 answer:
Oliga [24]3 years ago
6 0

Answer:

3,000

Explanation:

As the income will be taxed at 25% the income tax liability will be for that amount

12,000 x 25% = 3,000

The tax deferred liability is generated from a temporary difference. The company is paying less income tax today but will pay more in the future. Hence there is a liability.

The accounting reason for this treatment is to match expenses with the time they occur or the revenues which generated.

You might be interested in
Sales $ 1,000,000 Net income $ 45,000 Current Assets $ 50,000 Fixed Assets $ 200,000 Total Assets $ 250,000 Current Liabilities
marishachu [46]

Answer:

Profit Margin = income / sales

45,000 / 1,000,000 = 4.5%

Return on Assets = income / assets

45,000 / 250,000 = 18%

Assets turnover = sales / assets

1,000,000 / 250,000 = 4

Earning per share: income / shares outstanding

45,000 / 40,000 = 1.125

Price- Earning ratio = market price / EPS

28 / 1.125 = 24,89

Return on Equity = income / equity*

45,000 / 120,000 = 37.5%

Debt to Equity ratio liab / equity

130,000 / 120,000 = 1,08

Explanation:

*solving for equity

Assets = laib + equity

250,000  =  130,000 + equity

equity = 120,000

5 0
3 years ago
"The spot price of the market index is $900. A 3-month forward contract on this index is priced at $930. What is the profit or l
Mademuasel [1]

Answer:

$10 profit

Explanation:

In this question, we are asked to calculate the profit or loss to a short position.

Firstly, we identify that the spot price of market index is $900.

Now, a three months forward contract equals a value of $930.

Raising the index to $920 at the expiry date is obviously a profit to the short position.

To calculate the profit here, we simply subtract the index at expiry date from the three months forward contract.

Mathematically, this is equal to $930-$920 = $10 profit

8 0
3 years ago
Which of the following would be a good opening statement to make to a new prospect as you visit for the first time with him?
bonufazy [111]

I think the answer is D

6 0
3 years ago
Read 2 more answers
Brooke and John formed a partnership. Brooke received a 40% interest in partnership capital and profits in exchange for contribu
spin [16.1K]

Answer:

$102,000

Explanation:

According to 26 US code Section 704(c) - Partner's distributive share :

Taxable gain to be recognized from sale = Sale value - ( Partner's share * Fair market value )

Brooke contributed the land, the gain realized before the land was contributed = $120,000 - $90,000 will be allocated entirely to her. She will also be allocated 40% of the gain after the contribution was made = ($150,000 - $120,000) x 40% = $30,000 x 40% = $12,000.

So the total gain recognized by Brooke will be $90,000 + $12,000 = $102,000.

Partnerships are pass through entities, the partners are taxed, not the partnership itself.

3 0
3 years ago
A ________ transaction in the interbank market is the simultaneous purchase and sale of a given amount of foreign exchange for t
miskamm [114]

Answer:

Explanation:

A swap transaction in the inter bank market is the simultaneous purchase and sale of a given amount of foreign exchange for two different value dates. The purchase and sale are with the same counterpart. A swap may be considered a technique for borrowing another currency on a fully collateralize basis.

3 0
3 years ago
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