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Spartans Corp. is a calendar year accrual basis C Corporation. The following information
has been provided:
Book income for Year 2 $2,500,000
Foreign Derived Intangible Income Deduction 200,000
Accumulated book depreciation at Year 1 end 1,500,000
Accumulated tax depreciation at Year 1 end 1,600,000
Book depreciation expense for Year 2 500,000
Tax depreciation expense for Year 2 900,000
Accumulated book depreciation at Year 2 end 2,000,000
Accumulated tax depreciation at Year 2 end 2,500,000
Reserve for bad debt at Year 1 end 200,000
Reserve for bad debt at Year 2 end 70,000
Accrued vacation (no payment w/in 2.5 mos.) as of Year 1 end 60,000
Accrued vacation (no payment w/in 2.5 mos.) as of Year 2 end 100,000
Interest capitalized for books, deductible for tax, Year 1 0
Interest capitalized for books, deductible for tax, Year 2 80,000
Loss carryforward as of Year 1 end 1,300,000
Loss carryforward as of Year 1 end on a more likely than not basis 900,000
Assume the Company did not record any UTB as of Year 1 end as part of the year end
provision analysis (i.e. gross NOL DTA was 1,300,000 as of Year 1 end)
Spartans Corp. Statutory tax rate as of Year 1end 35%
Spartans Corp. estimated Statutory tax rate for Year 2 21%
Determine Spartans Corp. ASC 740 provision for Year 2 (current and deferred provision
as well as the current tax liability and deferred tax asset/liability balance) and record the
journal entry
Can you please help me with the highlighted sections? ty!
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