Solution-How much deferred income tax liability the company

How much deferred income tax liability the company recognize

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Reference no: EM132350623

Question - The following table illustrates the differences between a company's contract revenue and recognized revenue for a four-year contract.

Contract revenue source	Year 1	Year 2	Year 3	Year 4
Financial statements	$40,000	$0	$0	$0
Tax return	$10,000	$10,000	$10,000	$10,000

Assume tax rates of 40% in Year 1 and 50% in all other years.

How much deferred income tax liability should the company recognize at the end of Year 1?

Reference no: EM132350623

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How much deferred income tax liability the company recognize

Reference no: EM132350623

Reference no: EM132350623

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