Exercise 19-20 Book Basis Tax Basis Warning Don\'t show me this message again fo
ID: 2461434 • Letter: E
Question
Exercise 19-20
Book Basis
Tax Basis
Warning
Don't show me this message again for the assignment
Ok
Cancel
Account Titles and Explanation
Debit
Credit
Warning
Don't show me this message again for the assignment
Ok
Cancel
Show List of Accounts
Link to Text
Link to Text
Teri Hatcher Inc.
Balance Sheet
December 31, 2013
Warning
Don't show me this message again for the assignment
Ok
Cancel
Show List of Accounts
Link to Text
Link to Text
Exercise 19-20
Teri Hatcher Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2013.Book Basis
Tax Basis
Equipment (net) $405,500 $336,700 Estimated warranty liability $218,200 $ –0–It is estimated that the warranty liability will be settled in 2014. The difference in equipment (net) will result in taxable amounts of $22,600 in 2014, $32,300 in 2015, and $13,900 in 2016. The company has taxable income of $525,900 in 2013. As of the beginning of 2013, the enacted tax rate is 35% for 2013–2015, and 31% for 2016. Hatcher expects to report taxable income through 2016.
Warning
Don't show me this message again for the assignment
Ok
Cancel
Explanation / Answer
Schedule of tax expense: Years 2013 2014 2015 2016 Taxable income 525,900 525,900 525,900 525,900 Tax Rate 35% 35% 35% 31% Tax Expenses 184,065 184,065 184,065 163,029
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.