deferred_tax_liabilities

deferred_tax_liabilities - collected in the following years...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Accounting for future taxable amounts – deferred tax liabilities Jason Company reports profit of $200,000 from installment sales of property in 2009. The gross profit percentage is 20%. Jason uses the accrual method of accounting for financial reporting purposes and the installment (cash) method of accounting for income tax purposes. This is reflected in Jason’s December 31, 2009 balance sheet as follows: GAAP Tax Note receivable $1,000,000 $0 The installment note is recognized for financial accounting purposes in 2009, but will be
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: collected in the following years when the enacted tax rates are: cash Year collected Tax rate 2010 100,000 35% 2011 200,000 30% 2012 300,000 25% 2013 400,000 20% 1,000,000 The tax rate for 2009 is 40%. Required : What amount should Jason report as deferred tax liability at December 31, 2009? Also, look at Jasons books for 2010-2013 if they report pretax financial income of $2,000,000 each year....
View Full Document

Ask a homework question - tutors are online