For its first year of operations, Tringali Corporation’s reconciliation of pretax accounting income to taxable income…
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Question “For its first year of operations, Tringali Corporation’s reconciliation of pretax accounting income to taxable income…”
For its first year of operations, Tringali Corporation’s reconciliation of pretax accounting income to taxable income is as follows: Pretax accounting income Permanent difference $310,000 (14,900) 295,100 (20,500) $274,600 Temporary difference-depreciation Taxable income Tringali’s tax rate is 39%. Assume that no estimated taxes have been paid. What should Tringali report as its deferred income tax liability as of the end of its first year of operations?
Mult le Choice o $35,400. o $7995. o $13,806. o $20,500.
Answer
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Answer: Option B) $7.995 ($20.500* 39%). Deferred tax liability can be calculated on temporary differences due to depreciation. Thus, tax rate is multiplied with temporary difference due depreciation
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