Bart, Inc., a newly organized corporation, uses the equity method of accounting for its 30%...
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Accounting
Bart, Inc., a newly organized corporation, uses the equity method of accounting for its 30% investment in Rex Co.'s common stock. During Year 1, Rex paid dividends of $300,000 and reported earnings of $900,000. In addition: The dividends received from Rex are eligible for the 65% dividends received deduction. All the undistributed earnings of Rex will be distributed in future years. There are no other temporary differences. Bart's Year 1 income tax rate is 30%. The enacted income tax rate after Year 1 is 21%. In Bart's December 31, Year 1, balance sheet, the deferred income tax liability should be O A. $13,230 O B. $18,900 O C. $24,570 O D. $37,800
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