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FIN_48_three_differences - determines that only $22,000 of...

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FIN 48: A deferred tax asset, a deferred tax liability and uncertainty In 2009 Stumberg Company reported pretax financial income of $415,000. Stumberg recorded the following transactions in 2009: $20,000 prepaid rent which is included in book income in 2010, $35,000 excess MACRS deprecation, and $30,000 accrued liability deducted for both book and tax purposes; however, the amount of the liability is subject to dispute. Stumberg applies the recognition and measurement criteria found in FIN 48, and
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Unformatted text preview: determines that only $22,000 of the accrued liability is currently deductible. That is, a $22,000 deduction • is more likely than not of being sustained on audit, based on the technical merits of the position, and • is the largest amount of benefit cumulatively greater than 50% likely to be realized Assume Stumberg’s tax rate is 35% Required : (1) Compute Stumberg’s 2009 taxable income. (2) Prepare the journal entry (or entries) to record Stumberg’s income taxes for 2009....
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