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Damm [24]
3 years ago
14

At December 31, DePaul Corporation had the following cumulative temporary differences associated with its operations:

Business
1 answer:
kirill115 [55]3 years ago
7 0

Answer: $26 million Net deferred tax liability

Explanation:

Net deferred tax liability (asset) = (Taxable temporary differences - Deductible temporary differences)* Tax rate

Taxable temporary differences = Depreciation expense + Income from installment sales

= 116 + 60

= $176 million

Deductible tax differences = Estimated warranty expense + rent revenue collected in advance

= 36 + 36

= $72 million

Net deferred tax liability (asset) = (176 - 72) * 25%

= $26 million

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