At December 31, 2016, Larkspur Company had a net deferred tax liability of $369,

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At December 31, 2016, Larkspur Company had a net deferred tax liability of $369,000. An explanation of the items that compose this balance is as follows.

In analyzing the temporary differences, you find that $31,600 of the depreciation temporary difference will reverse in 2017, and $127,300 of the temporary difference due to the installment sale will reverse in 2017. The tax rate for all years is 40%.

Indicate the manner in which deferred taxes should be presented on Larkspur Company’s December 31, 2016, balance sheet.

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Exercise 19-9 Your answer is partially correct. Try again. At December 31, 2016, Larkspur Company had a net deferred tax liability of $369,000. An explanation of the items that compose this balance is as follows. Resulting Balances in Deferred Taxes 217,104) ,400 1. Excess of tax depreciation over book depreciation 2. Accrual, for book purposes, of estimated loss contingency from pending lawsuit that is expected to be settled in 2017. The loss will be deducted on (52,900) 3. Accrual method used for book purposes and installment method used for tax purposes for an isclated installment sale of an investment. 204,500 an investment,hod In analyzing the temporary differences, you find that $31,600 of the depreciation temporary difference will reverse in 2017, and $127,300 of the temporary difference due to the installment sale will reverse in 2017, Te tax rate for all years is 40% Indicate the manner in which deferred taxes should be presented on Larkspur Company's December 31, 2016, balance sheet. Larkspur Company's Balance Sheet Deferred Tax Liability

Explanation / Answer

resulting Deferred Tax asset Deferred tax liability Depreciation $217,400 Lawsuit -52900 Installment sale (127300*40%) 50920 Installment sale (204500-50920) 153580 Current assets Deferred Tax asset (52900-50920) 1980 Balance Sheet December 31 2016 Long term liabilities Deferred tax laibilities 370980 (217400+153580) If any doubt please comment

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At December 31, 2016, Larkspur Company had a net deferred tax liability of $369,

At December 31, 2016, Morrison Company had 700 shares of common stock outstandin

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At December 31, 2016, Larkspur Company had a net deferred tax liability of $369,

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