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bagirrra123 [75]
3 years ago
5

Loran's pretax accounting income in 20X1 is $100,000. Loran had bad debt expense for financial reporting purposes of $14,000 in

20X1. In 20X1, Loran deducted $4,000 in bad debts. Loran expects the temporary difference to reverse $3,000 in 20X2 and $7,000 in 20X3. The income tax rate is 40%. What is the amount in the deferred tax asset account at the end of 20X2?
Business
1 answer:
stira [4]3 years ago
6 0

Answer:

$2,800

Explanation:

Particulars                                                                       Amount

Favorable temporary difference at the end of 20X2   $7000

* Income tax rate                                                             <u>   40%  </u>

Deferred tax asset account at the end of 20X2         <u>$2,800</u>

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Direct method

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Explanation:

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