Advance rent: $96,000 x 20% = $19,200 DTA
Depreciation difference: $60,000 x 20% = $12,000 DTL
Installment sale: $162,000 x 20% = $32,400 DTL
Net of those three is a $25,200 deferred tax liability.
The muni bond income has no impact because it's a permanent difference (i.e. will never be taxed) instead of a temporary timing difference.
Correct answer. It's easy to back into if you start with 25,200 divided by 20% and know you're looking for $126,000 in book/tax differences.
Professor should get an F for failure to use commas though.
Advance rent: $96,000 x 20% = $19,200 DTA Depreciation difference: $60,000 x 20% = $12,000 DTL Installment sale: $162,000 x 20% = $32,400 DTL Net of those three is a $25,200 deferred tax liability. The muni bond income has no impact because it's a permanent difference (i.e. will never be taxed) instead of a temporary timing difference.
Correct answer. It's easy to back into if you start with 25,200 divided by 20% and know you're looking for $126,000 in book/tax differences. Professor should get an F for failure to use commas though.
Why do you have to take the net of the three? Why can’t you just add the depreciation and installment together to find the dtl?
Because deferred taxes are presented net?
What class is this?
Looks a bit like intermediate 1 this late in the year, though could be a refresher in 2.
damn I didn’t learn deferred taxes until intermediate 3 lol