Ask Question
9 September, 06:07

company reported income before taxes of $800,000 for Year 2. The company did not have temporary taxable differences at the end of Year 1 but reported a net deferred tax asset of $6,000 for Year 2. The effective income tax rate is 30 percent. What amount should the company pay as income tax for Year 2?

+4
Answers (1)
  1. 9 September, 06:32
    0
    On Year 2 the company should pay $240.000 as tax income.

    Explanation:

    The net deferred tax asset works to the reduction of future taxes, not apply to the current year, the value generated in the current year by this concept are accounts set aside for future years.

    On Year 2, the company must paid taxes over the total income before taxes reported and use the deferred taxes in future Incomes.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “company reported income before taxes of $800,000 for Year 2. The company did not have temporary taxable differences at the end of Year 1 ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers