deferred taxes

deferred taxes - Deferred Tax Accounting Year 1 Income...

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Deferred Tax Accounting Tax return GAAP Books Year 1 Year 2 Year 3 Total Year 1 Year 2 Year 3 Total Income before depreciation and tax 25,000 25,000 25,000 75,000 25,000 25,000 25,000 75,000 Depreciation expense 15,000 15,000 30,000 10,000 10,000 10,000 30,000 Income before tax 10,000 10,000 25,000 45,000 15,000 15,000 15,000 45,000 Taxes Payable 35% 3,500 3,500 8,750 15,750 5,250 5,250 5,250 15,750 Tax expense - - Current 3,500 3,500 8,750 15,750 3,500 3,500 8,750 15,750 Deferred - 1,750 1,750 (3,500) - Total tax provision -expense 3,500 3,500 8,750 15,750 5,250 5,250 5,250 15,750 Net Income 6,500 6,500 16,250 29,250 9,750 9,750 9,750 29,250 What was the cause of the difference between book and tax? Did the difference result in paying more or less taxes in year one? What amount of tax expense should be recorded in years one, two and three for financial statements?
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Books Tax return Net Income before tax per the financial statements 100,000 100,000 Adjustment for permanent differences: Tax credits related to hiring additional employees
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This note was uploaded on 02/16/2012 for the course FINA 470 taught by Professor Austin during the Fall '11 term at South Carolina.

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deferred taxes - Deferred Tax Accounting Year 1 Income...

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