What deferred tax amount should charmed record

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Reference no: EM131884866

Question: In 2015 Charmed, Inc. recorded book income of $370,000. The company's only temporary difference relates to a $60,000 installment sale that it recorded for book purposes; there are no permanent differences. Charmed anticipates receiving payments equally over the following three years. The current enacted tax rate in 2015 is 35%. The substantively enacted tax rates for the following three years are 30%, 35%, and 38%, respectively.

Under U.S. GAAP, what deferred tax amount should Charmed record for this temporary difference?

Reference no: EM131884866

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