To calculate the net deferred tax liability (DTL), we need to consider the temporary differences between the book and taxable income and apply the appropriate tax rates. Let's break down the calculations:
1. Unearned rental income:
The unearned rental income corresponds to the collection of a 6-month rent that covers the period from January 1, 2021, to June 30, 2021. It is recognized in 2020 for book purposes but not for tax purposes since it relates to the next year.
Temporary difference: $193,302
Tax rate: 0.36
Deferred tax liability: $193,302 * 0.36 = $69,589.92
2. Obligation for expenses of guarantees:
In 2021, $374,698.5 was disbursed to comply with the company's guarantees, but the estimated expense for guarantees in the 2021 Statement of Income and Expenses was $224,819.1. This represents a timing difference since the expense was recognized earlier for book purposes than for tax purposes.
Temporary difference: $149,879.4
Tax rate: 0.36
Deferred tax liability: $149,879.4 * 0.36 = $53,956.58
3. Additional depreciation on the return:
The depreciation expense on the books is greater than that on the payroll by $104,524. This represents a timing difference.
Temporary difference: $104,524
Tax rate: 0.36
Deferred tax asset: $104,524 * 0.36 = $37,647.84 (since it is an expense difference, it results in a deferred tax asset)
Now, to calculate the net deferred tax liability (DTL), we subtract the deferred tax asset from the deferred tax liability:
Net DTL = Deferred tax liability - Deferred tax asset
Net DTL = $69,589.92 + $53,956.58 - $37,647.84
Net DTL = $85,898.66
Therefore, the correct answer is not provided in the options.
At the end of its first year of operations, ABC prepared the reconciliation of its book income and its taxable income for 2020 as follows:
Income before taxes $1086271
Less: Exempt Dividend Income (50791)
Unearned Rental Income 193302
Obligation for expenses of guarantees 249799
Less: Additional depreciation on the return (830795)
Taxable Income $647786
Yo. The unearned rental income corresponds to the collection of a 6-month rent that covers the period from January 1, 2021 to June 30, 2021.
ii. In 2021, $374,698.5 were disbursed to comply with the company's guarantees. However, the estimated expense for guarantees in the 2021 Statement of Income and Expenses was $224,819.1
iii. In 2021, the depreciation expense on the books is greater than that on the payroll by $104,524.
The legislated tax rate (enacted tax rate) for the current period is 0.36. Congress has already drafted the bill to reduce the corporate tax rate to 0.25 effective next year. The project was approved shortly before the end of the second quarter of 2021.
As of 12/31/2021, ABC's Statement of Financial Position will report a NET Deferred Tax Debt (DTL, net) for
a. 233202.96
b. 206547.65
c. 225486.50
d. 156587.85
e. 119118.00
1 answer