Reference no: EM132767580
Question -
a. In 2017, Kerry Corp's financial statement showed accrued losses on disposal of unused plant facilities of $3,600,000. The facilities were sold in December 2018 and a $3,600,000 loss was recognized for tax purposes then.
b. In 2018, Kerry Corp's paid $150,000 for a two-year life insurance policy for their CEO Kerry, and the company was the beneficiary. Please assume that the enacted tax rate is 35% in both 2017 and 2018.
Question 1 - Compute the amount reported as net deferred income taxes on Krause's balance sheet at December 31, 2017 should be an Asset or Liability?
Question 2 - What would the amount be?
For 2, Show me the steps of your calculation and your explanations for full credit. Round your answers to integers.
Question 3 - Trump enacted the tax cut and job act in 2018 and effectively changed the corporate tax rate to 21%. For Kerry's quarterly financial statement on March 2018, how would this change in tax rate impact Kerry's net deferred income taxes? Show me your calculation.
Question 4 - Is this change after the tax rate cut counter-intuitive? Why and why not?
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