Question

vanhoe Company reported the following results for the year ended December 31, 2021, its first year of operations: 2021 Income (per books before income taxes)$1510000 Taxable income 2700000 The disparity between book income and taxable income is attributable to a temporary difference which will reverse in 2022. What should Ivanhoe record as a net deferred tax asset or liability for the year ended December 31, 2021, assuming that the enacted tax rates in effect are 30% in 2021 and 25% in 2022

Answer 1

the deferred tax liability for the year ended is $297,500

Step-by-step explanation:

The computation of the net deferred tax or liability is as follows:

= (Taxable income - income before income taxes) × enacted tax rate

= ($2,700,000 - $1,510,000) × 0.25

= $1,190,000 × 0.25

= $297,500

Therefore the deferred tax liability for the year ended is $297,500

Hence, the same is to be considered