MC Qu. 21 LO 16-01 Isaac Inc. began operations in January 2013. For certain of i
ID: 2500864 • Letter: M
Question
MC Qu. 21 LO 16-01 Isaac Inc. began operations in January 2013. For certain of its...
Isaac Inc. began operations in January 2013. For certain of its property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments.
In 2013, Isaac had $702 million in sales of this type. Scheduled collections for these sales are as follows:
174 million
$702 million
Assume that Isaac has a 31% income tax rate and that there were no other differences in income for financial statement and tax purposes.
Ignoring operating expenses, what deferred tax liability would Isaac report in its year-end 2013 balance sheet? (Round your answer to the nearest whole million.)
$218 million
$25 million
$622 million
$193 million
Isaac Inc. began operations in January 2013. For certain of its property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments.
Explanation / Answer
Deferred tax liability that Isaac would report in its year-end 2013 balance sheet = (702 - 80) * 31 %
= 622 * 31 %
= $ 193 Milion
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.