Hafnaoui Company reported pretax net income from continuing operations of $1,168,000 and taxable income of $695,500. The book-tax difference of $472,500 was due to a $315,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $126,000 due to an increase in the reserve for bad debts, and a $283,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $157,500; the beginning balance in the account was $31,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,046,000 ($869,000) and its ending book (tax) basis is $1,615,000 ($1,123,000). Problem 17-77 Part b (Algo) b. Compute Hafnaoui Company's deferred income tax expense or benefit. Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.
Hafnaoui Company reported pretax net income from continuing operations of $1,168,000 and taxable income of $695,500. The book-tax difference of $472,500 was due to a $315,000 favorable temporary difference relating to depreciation, an unfavorable temporary difference of $126,000 due to an increase in the reserve for bad debts, and a $283,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve for bad debts had a balance of $157,500; the beginning balance in the account was $31,500. Hafnaoui's beginning book (tax) basis in its fixed assets was $1,046,000 ($869,000) and its ending book (tax) basis is $1,615,000 ($1,123,000). Problem 17-77 Part b (Algo) b. Compute Hafnaoui Company's deferred income tax expense or benefit. Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 24CE
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ces
Hafnaoui Company reported pretax net income from continuing operations of $1,168,000 and taxable income of
$695,500. The book-tax difference of $472,500 was due to a $315,000 favorable temporary difference relating to
depreciation, an unfavorable temporary difference of $126,000 due to an increase in the reserve for bad debts, and a
$283,500 favorable permanent difference from the receipt of life insurance proceeds. At the end of the year, the reserve
for bad debts had a balance of $157,500; the beginning balance in the account was $31,500. Hafnaoui's beginning book
(tax) basis in its fixed assets was $1,046,000 ($869,000) and its ending book (tax) basis is $1,615,000 ($1,123,000).
Problem 17-77 Part b (Algo)
b. Compute Hafnaoui Company's deferred income tax expense or benefit.
Note: Enter all numbers as a positive number and indicate whether a deferred tax expense or a deferred tax benefit.
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