Aouabdia Corporation had the following balances in its accounts at January 1,2022 . a) Deferred...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Aouabdia Corporation had the following balances in its accounts at January 1,2022 . a) Deferred tax liability, January 1,2022:$45,000 b) Deferred tax asset, January 1,2022:$17,000 c) Book income before tax: $105,000. Aouabdia also had the following: a) Deductible depreciation expense in excess of book causing a cumulative temporary difference of $230,000. b) Prepaid rental income taxable this year (but recorded as deferred revenue for book). causing a cumulative taxable amount of $95,000 this year. c) A fine imposed by the EPA in an amount of $100,000 that was expensed for financial reporting purposes but not permitted as a deduction for tax purposes. Aouabdia's income tax rate is 21% for all years and it expects to generate positive income for the near future. 1) Prepare a schedule computing Aouabdia's pretax financial (book) income, current income tax payable, deferred income tax payable, deferred income tax asset, and total provision for income tax expense for 2022. Make sure you clearly label each amount. 2) If it was more likely than not that Aouabdia would not have future positive income for the foreseeable future, what does GAAP require Aouabdia to do
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
