F International Speedway

F International Speedway - (106,998 10 39 ii Cash...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
F. i. ISC doesn’t record admission revenue when event tickets are purchased and paid for because the event has to be completed before ISC records them. By doing this, ISC can defer their taxes on certain purchases until after an event has been completed. ii. If they received the cash for a race in advance, it would create a deferred tax asset, it would actually decrease their deferred tax liability because of the fact that they are receiving cash in advance for something that hasn’t actually happened yet. It previously stated that the company does not record the purchase until the event is completed, so this would make their pretax accounting income increase for the next year in 2004, and the taxable income would decrease for 2004. This will slowly cause the taxable and accounting income to equal out and eventually cause there to be no liability or asset in the deferred tax account. iii. i. A. Deferred tax asset 4,172.92 Income tax payable 4,172.92
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: (106,998 * 10% * 39%) ii. Cash 10,000,000 Deferred income liability 10,000,000 iii. Deferred income liability 53,499 Revenue 53,499 (106,998 * 50%) Income tax expense 2,086.46 Deferred tax asset 2,086.46 (4,172.92 * 50%) iv. Income tax expense 107 Deferred tax asset 107 (10,699.80 * 50% *37%) = 1,979.46 2,086.46 – 1,979.46 = 107 G. i. A loss carry forward is an accounting technique that applies the current year's net operating losses to future years' profits in order to reduce tax liability. It meets the definition of an asset because of the fact that it is something that has already happened and been dealt with, but is spread out to help net income of the year that the operating loss occurred. ii. No it wouldn’t, the remaing NOL would no longer be able to be used because it has expired so it would have to be taken off of the books and could not be used in any future years. Therefore it would not be counted as an asset....
View Full Document

{[ snackBarMessage ]}

Page1 / 2

F International Speedway - (106,998 10 39 ii Cash...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online