Q1. A company purchased a new pizza oven directly from Italy for $12,675. It will work for 5 years and has no salvage value. The tax rate is 41%, and annual revenues are constant at $7,192. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35% in years 1 and 2, and 30% in year 3. For purposes of this exercise ignore all expenses other than depreciation. Assume the tax rate for years 4 and 5 changed from 41% to 31%. What will be the deferred tax liability as of the end of year 3 and the resulting adjustment to net income in year 3 for financial reporting purposes due to the change in the tax rate? Deferred Tax Liability Net Income
A) $1,572 $747 B) $1,039 $507 C) $1,572 $507
Q2. An analyst has gathered the following tax information:
| Year 1 | Year 2 | Pretax Income | $60,000 | $60,000 | Taxable Income | $50,000 | $65,000 |
The current tax rate is 40%. Assume the tax rate is reduced to 30% and the change is enacted at the beginning of Year 2. In year 1, what are the taxes payable and what is the deferred tax liability? Taxes Payable Deferred Tax Liability
A) $20,000 $3,000 B) $24,000 $3,000 C) $20,000 $1,500
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发表于 2009-1-19 10:38
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