any recommendations on how to tackle the income tax differed tax liability/assets problems? No matter how hard i try it always gets me.
look at this sim from Wiley :@
The following situation requires you to analyze income tax information for reporting purposes. At the beginning of the current year, a firm reported a $15,000 deferred income tax liability from work performed the previous year for a customer that was billed at the end of that year ‐ a note receivable was recorded at that time. The tax rate is 30%. Events during the current year for the firm:
•payment in full was received on the note from the customer from the previous year
•recognized $8,000 of bad debt expense for the books, and wrote off $3,000 of accounts (this amount is deductible for tax purposes)
•recognized a $2,000 unrealized gain on trading securities purchased during the current year
•credit sales for the year totaled $80,000. Collections on account were $60,000. The firm began the year with no accounts receivable balance.
•deferred tax assets are more likely than not to be realized
•for simplicity, assume that no quarterly income tax installment payments were made during the year, and that the firm accrues the entire year's tax expense at year‐end
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