Evaluate the deferred tax asset or liability

Assignment Help Financial Accounting

Reference no: EM133132

Question :

The subsequent information is available for the first three years of operations for Cooper Company:

1. Year Taxable Income

2012 $500,000

2013 360,000

2014 400,000

2. On January 2, 2012, heavy equipment costing $600,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line technique of depreciation is used for book purposes and the tax depreciation taken each year is listed given:

Tax Depreciation

2012 2013 2014 2015 Total

$198,000 $270,000 $90,000 $42,000 $600,000

3. On January 2, 2013, $270,000 was collected in advance for rental of a building for a three-year period. The whole $270,000 was reported as taxable income in 2013, but $180,000 of the $240,000 was reported as unearned revenue at December 31, 2013 for book purposes.

4. The enacted tax rates are 40% for every year.

Required:

(a) Purpose a schedule comparing depreciation for financial reporting and tax purposes.

(b) Evaluate the deferred tax asset or liability at the end of 2012.

(d) Purpose a schedule of the deferred tax asset and liability at the end of 2013.

Reference no: EM133132

Questions Cloud

Evaluate the taxable income : Which of the subsequent statements about Ginger's hobby activity is/are correct?

Evaluate the consolidated balance for the equipment account : Evaluate the consolidated balance for the Equipment account

Evaluate the cvp income statement : Evaluate the CVP income statement

Illustrate the steps in the human resource planning method : Illustrate the steps in the human resource planning method What are the key mechanisms of a Human Resource Plan

Evaluate the deferred tax asset or liability : Purpose a schedule comparing depreciation for financial reporting and tax purposes. Evaluate the deferred tax asset or liability at the end of 2012.

What are the pressures that lead managers and executives : What are the pressures that lead managers and executives to "cook the books"?

Purpose a combined cost of goods sold and income statement : Purpose a combined cost of goods sold and Income Statement

Critically analyze the diverse impacts of integrated resorts : Critically analyze the diverse impacts of integrated resorts on the local community and on the environment of the site As a resort planner employed by the government, discuss the different mechanism which you can use to mitigate the negative impa..

Evaluate the 2011 year-end debt ratio for the business : Generate balance sheets for the business as of 31 st December, 2010 and 2011.Hint: Report only net equity on the balance sheet and remember that net equity equals the difference between liabilities and assets.)

User Account

All Pages