Amount of financial depreciation

Reference no: EM131014188

Prior to and during 2016, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of $24,500 for financial reporting purposes and of $20,000 for tax purposes at the end of 2016.

In addition, Shadrach recognized a $3,500 estimated liability for legal expenses in the financial statements during 2016; it expects to pay this liability (and deduct it for tax purposes) in 2020. The current tax rate is 30%, no change in the tax rate has been enacted, and the company expects to be profitable in future years. What is the amount of the net noncurrent deferred tax liability at the end of 2016?

Reference no: EM131014188

Questions Cloud

Calculate the beginning-of-year balance for long-term debt : Dogs 4 U Corporation has net cash flow from financing activities for the last year of $36 million. The company paid $182 million in dividends last year. During the year, the change in notes payable on the balance sheet was $41 million and change in c..

Accumulate money for his down payment : John plans to buy a vacation home in 8 years from now and wants to have saved $57965 for a down payment. how much money should he place today in a saving account that earns 4.63 % per year (compound daily) to accumulate money for his down payment?

Considering purchasing a smaller chain : Raymond Supply, a national hardware chain, is considering purchasing a smaller chain, Strauss & Glazer Parts (SGP). Raymond's analysts project that the merger will result in the following incremental free cash flows, tax shields, and horizon values: ..

What are the three two-sided p-values : For purposes of multiple comparisons, any of these three tests is signi?cant if its P-value is no greater than 0.05/3 = 0.0167. Which pairs differ signi?cantly at the overall 0.05 level?

Amount of financial depreciation : Prior to and during 2016, Shadrach Company reported tax depreciation at an amount higher than the amount of financial depreciation, resulting in a book value of the depreciable assets of $24,500 for financial reporting purposes and of $20,000 for ..

Firms that are acquired usually have a market price : When Texaco purchased Getty Oil, many financial analysts felt that the deal made sense because it increased Texaco's market share and expanded its shrinking oil reserves. This merger exemplified the belief among the natural resource companies that bu..

What is the objects velocity at the moment of impact : What is the object's velocity, speed, and acceleration at time t? About how long does it take the object to hit the ground? What is the object's velocity at the moment of impact?

Tax credit for rehabilitation expenditures : Sonja is considering the purchase and renovation of an old building. She has heard about the tax credit for rehabilitation expenditures, but Sonja does not know the specific rules applicable to the credit. Explain the most important and relevant pr..

Bondholders do well but shareholders see their value : In a typical LBO, bondholders do well but shareholders see their value decline. Firms are forbidden by law to sell any assets during the first five years following a leverage buyout. LBOs are never backed by private equity firms. d. LBOs typically us..

User Account

All Pages