3. Foltz Corp.\'s 2014 income statement had pretax financial income of $250,000

Question

3. Foltz Corp.'s 2014 income statement had pretax financial income of $250,000 in its first year of operations. Foltz uses an accelerated cost recovery method on its tax return and straight-line depreciation for financial reporting. The differences between the book and tax deductions for depreciation over the five-year life of the assets acquired in 2014, and the enacted tax rates for 2014 to 2018 are as follows: Book Over (Under) Tax Tax Rates 2014 $(50,000) 35% 2015 (65,000) 30% 2016 (15,000) 30% 2017 60,000 30% 2018 70,000 30% There are no other temporary differences. In Foltz's December 31, 2014 balance sheet, the noncurrent deferred income tax liability and the income taxes currently payable should be Noncurrent Deferred Income Taxes Income Tax Liability Currently Payable a. $39,000 $50,000 b. $39,000 $70,000 c. $15,000 $60,000 d. $15,000 $70,000

Explanation / Answer

3. Foltz Corp.'s 2014 income statement had pretax financial income of $250,000

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