HELP! How to determine Deferred tariff liability?
I am surrounded by college studying Accounting and am currently taking a condensed summer Intermediate Accounting course. We are erudition roughly speaking income taxes, I am so confused, and the book doesn't appear to serve at adjectives!!
My give somebody the third degree is: Tower corp. recognize revenues from adjectives sale below the accrual method, however, within its income export tax returns, Tower reports qualify sale lower than the installment method.
In yr. 2023, gross profit underneath the Accrual method is $1,600,000 and below the installment method is $600,000. In yr. 2024, GP below accrual method is $2.6M and $1.4M below the installment method. Tax rate is 30% for 2023 and adjectives years. There are no other unbreakable or intervening differences. In its Dec. 31, 2024 go together sheet, what amount should Tower report as a liability for deferred income taxes?
Thanks for the relief!
Answers:
to integer deferred income import tax you do this. For 2023 lug 1.6 million below installment method and subtract the 600,000 beneath accrual, you hold 1,000,000 favorable deferral of income, 30% export tax rate system deferred taxes of $300,000. For 2024, purloin 2.6 and subtract 1.4, next to 1.2 million of deferral of income (I am assuming 2023 reversed itself for 2024). deferred taxes should be $360,000.
Use the installment method because it allow deferral until the payments are received.
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My give somebody the third degree is: Tower corp. recognize revenues from adjectives sale below the accrual method, however, within its income export tax returns, Tower reports qualify sale lower than the installment method.
In yr. 2023, gross profit underneath the Accrual method is $1,600,000 and below the installment method is $600,000. In yr. 2024, GP below accrual method is $2.6M and $1.4M below the installment method. Tax rate is 30% for 2023 and adjectives years. There are no other unbreakable or intervening differences. In its Dec. 31, 2024 go together sheet, what amount should Tower report as a liability for deferred income taxes?
Thanks for the relief!
Answers:
to integer deferred income import tax you do this. For 2023 lug 1.6 million below installment method and subtract the 600,000 beneath accrual, you hold 1,000,000 favorable deferral of income, 30% export tax rate system deferred taxes of $300,000. For 2024, purloin 2.6 and subtract 1.4, next to 1.2 million of deferral of income (I am assuming 2023 reversed itself for 2024). deferred taxes should be $360,000.
Use the installment method because it allow deferral until the payments are received.