Exercise 19-12 Warning Don\'t show me this message again for the assignment Ok C
ID: 2461437 • Letter: E
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Exercise 19-12
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Show List of Accounts
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Account Titles and Explanation
Debit
Credit
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Duncan Corporation
Income Statement (Partial)
Year ended December 31, 2014
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Exercise 19-12
The following facts relate to Duncan Corporation.1. Deferred tax liability, January 1, 2014, $161,100. 2. Deferred tax asset, January 1, 2014, $53,700. 3. Taxable income for 2014, $281,925. 4. Cumulative temporary difference at December 31, 2014, giving rise to future taxable amounts, $563,850. 5. Cumulative temporary difference at December 31, 2014, giving rise to future deductible amounts, $255,075. 6. Tax rate for all years, 40%. No permanent differences exist. 7. The company is expected to operate profitably in the future.
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Explanation / Answer
Pretax Financial Income = 281925 + 161100 - (255075 - 53700/0.40) = $322200
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