jscholl2983
May 5, 2007, 10:36 AM
I know it's a long question, sorry
Karr, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $900,000 will be collected in the following years when the enacted tax rates are:
Collection of Income Enacted Tax Rates
2007 $ 90,000 35%
2008 180,000 30%
2009 270,000 30%
2010 360,000 25%
The installment income is Karr's only temporary difference. What amount should be included in the deferred income tax liability in Karr's December 31, 2007 balance sheet?
a. $225,000
b. $256,500
c. $283,500
d. $315,000
Karr, Inc. uses the accrual method of accounting for financial reporting purposes and appropriately uses the installment method of accounting for income tax purposes. Installment income of $900,000 will be collected in the following years when the enacted tax rates are:
Collection of Income Enacted Tax Rates
2007 $ 90,000 35%
2008 180,000 30%
2009 270,000 30%
2010 360,000 25%
The installment income is Karr's only temporary difference. What amount should be included in the deferred income tax liability in Karr's December 31, 2007 balance sheet?
a. $225,000
b. $256,500
c. $283,500
d. $315,000