Libby_7e_MBA_Companion_Solutions

44 lease payable l 21252756 cash a assets 30000000

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

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

Unformatted text preview: 56 Cash (–A) Assets 300,000.00 = Cash –300,000.00 LO 5 Liabilities + Stockholders’ Equity Lease payable –212,527.56 Interest expense (+E) –87,472.44 S E-5 Calculating a deferred tax liability On January 1, 2010, Berkshire Hathaway purchased a piece of equipment for $90,000. The following table reflects how Berkshire is depreciating the equipment for financial reporting purposes and for tax purposes: TAX Fiscal year ending Depreciation Expense Accumulated Depreciation 2010 2011 2012 30,000 40,005 19,995 30,000 70,005 90,000 Book Value 90,000 60,000 19,995 0 FINANCIAL REPORTING Fiscal year ending Depreciation Expense Accumulated Depreciation 2010 2011 2012 30,000 30,000 30,000 30,000 60,000 90,000 Book Value 90,000 60,000 30,000 0 Below is information from Berkshire’s tax filing: TAX Fiscal year ending Revenue Taxable Income Tax Expense (35%) 2010 2011 2012 200,000 200,000 200,000 170,000 159,995 180,005 59,500 55,998 63,002 Use the information above to fill in the deferred tax liability column below: FINANCIAL REPORTING Fiscal year ending Revenue Taxable Income Tax Expense 2010 2011 2012 200,000 200,000 200,000 170,000 170,000 170,000 59,500 59,500 59,500 Page 6 of 21 Deferred Tax Liability END-OF-CHAPTER MATERIAL ANSWER FINANCIAL REPORTING Fiscal year ending Taxable Income Tax Expense Deferred Tax Liability 2010 2011 2012 LO 5 Revenue 200,000 200,000 200,000 170,000 170,000 170,000...
View Full Document

This homework help was uploaded on 03/27/2014 for the course ACCOUNTING 151 taught by Professor Chinn during the Spring '12 term at Lehigh University .

Ask a homework question - tutors are online