Ask Question
1 August, 01:44

Oriole Corporation reported $203000 in revenues in its 2021 financial statements, of which $69000 will not be included in the tax return until 2022. The enacted tax rate is 30% for 2021 and 25% for 2022. What amount should Oriole report for deferred income tax liability in its balance sheet at December 31, 2021

+2
Answers (1)
  1. 1 August, 01:46
    0
    Answer: $17,250

    Explanation:

    Income Tax Liability is an amount that the company 'owes' the tax man because they did not pay tax on some earnings in a certain year mainly due to differences in Accounting methods.

    That means that $69,000 is the tax figure to be focused on as it is the figure that the Income tax liability will be calculated from.

    $69,000 is not to be taxed this year but will be paid tax on in 2022.

    The tax rate for 2022 is 25%.

    The Tax in 2022 is therefore,

    = 25% * 69,000

    = $17,250

    $17,250 is therefore the amount that Oriole Corporation should record as deferred income tax liability in its balance sheet at December 31, 2021.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Oriole Corporation reported $203000 in revenues in its 2021 financial statements, of which $69000 will not be included in the tax return ...” 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