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Exercise 19-3 (Part Level Submission) Sage Corporation began 2017 with a $98,600

ID: 2581227 • Letter: E

Question

Exercise 19-3 (Part Level Submission)

Sage Corporation began 2017 with a $98,600 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $335,700, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $504,700, the tax rate for all years is 40%, and taxable income for 2017 is $415,500.

(a)

Exercise 19-3 (Part Level Submission)

Sage Corporation began 2017 with a $98,600 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $335,700, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $504,700, the tax rate for all years is 40%, and taxable income for 2017 is $415,500.

Explanation / Answer

a.

Taxable income $415500

Tax rate 40%

Income Tax payable $166200.