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Parry Corp. acquired new equipment for $6,900,000 in 20X6. For accounting purposes, the equipment will be depreciated over five years, straight-line, with a full year's depreciation in the first year. For income tax purposes, Parry can take CCA over the next three years of $405,000 in 20X6, $729,000 in 20X7, and $587,250 in 20X8. Parry's income tax rate is 36%. Required: For each 31 December 20X6 through 20X8, determine: (Enter your answers in thousands to two decimal places.) .The tax basis for the equipment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Tax basis $405.00 $720.00 $ 587.25 2. The accounting basis for the equipment. Answer is complete but not entirely correct. Accounting basis 20X6 20X7 20X8 $1,380.00 $1,380.00 $1,380.00 3. The cumulative amount of the temporary difference relating to the equipment. Answer is complete but not entirely correct. Temporary difference $ 20X6 975.00 20X7 20X8 $ 651.00 $ 793.00 4. The balance of deferred income tax asset or liability that would be reported on the statement of financial position. Answer is complete but not entirely correct. Deferred income tax balance 20X6 20X7 20X8 $ 351.00 $234.00 $285.00 3. The amount of the deferred income tax adjustment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Deferred income tax Adjustment $ 351.00 (117.00) $ 51.00

Parry Corp. acquired new equipment for $6,900,000 in 20X6. For accounting purposes, the equipment will be depreciated over five years, straight-line, with a full year's depreciation in the first year. For income tax purposes, Parry can take CCA over the next three years of $405,000 in 20X6, $729,000 in 20X7, and $587,250 in 20X8. Parry's income tax rate is 36%. Required: For each 31 December 20X6 through 20X8, determine: (Enter your answers in thousands to two decimal places.) .The tax basis for the equipment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Tax basis $405.00 $720.00 $ 587.25 2. The accounting basis for the equipment. Answer is complete but not entirely correct. Accounting basis 20X6 20X7 20X8 $1,380.00 $1,380.00 $1,380.00 3. The cumulative amount of the temporary difference relating to the equipment. Answer is complete but not entirely correct. Temporary difference $ 20X6 975.00 20X7 20X8 $ 651.00 $ 793.00 4. The balance of deferred income tax asset or liability that would be reported on the statement of financial position. Answer is complete but not entirely correct. Deferred income tax balance 20X6 20X7 20X8 $ 351.00 $234.00 $285.00 3. The amount of the deferred income tax adjustment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Deferred income tax Adjustment $ 351.00 (117.00) $ 51.00

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter19: Capital Investment
Section: Chapter Questions
Problem 18E
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Parry Corp. acquired new equipment for $6,900,000 in 20X6. For accounting purposes, the equipment will be depreciated over five years, straight-line, with a full year's depreciation in the first year. For income tax purposes, Parry can take CCA over the next three years of $405,000 in 20X6, $729,000 in 20X7, and $587,250 in 20X8. Parry's income tax rate is 36%. Required: For each 31 December 20X6 through 20X8, determine: (Enter your answers in thousands to two decimal places.) .The tax basis for the equipment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Tax basis $405.00 $720.00 $ 587.25 2. The accounting basis for the equipment. Answer is complete but not entirely correct. Accounting basis 20X6 20X7 20X8 $1,380.00 $1,380.00 $1,380.00 3. The cumulative amount of the temporary difference relating to the equipment. Answer is complete but not entirely correct. Temporary difference $ 20X6 975.00 20X7 20X8 $ 651.00 $ 793.00 4. The balance of deferred income tax asset or liability that would be reported on the statement of financial position. Answer is complete but not entirely correct. Deferred income tax balance 20X6 20X7 20X8 $ 351.00 $234.00 $285.00 3. The amount of the deferred income tax adjustment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Deferred income tax Adjustment $ 351.00 (117.00) $ 51.00
Transcribed Image Text:Parry Corp. acquired new equipment for $6,900,000 in 20X6. For accounting purposes, the equipment will be depreciated over five years, straight-line, with a full year's depreciation in the first year. For income tax purposes, Parry can take CCA over the next three years of $405,000 in 20X6, $729,000 in 20X7, and $587,250 in 20X8. Parry's income tax rate is 36%. Required: For each 31 December 20X6 through 20X8, determine: (Enter your answers in thousands to two decimal places.) .The tax basis for the equipment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Tax basis $405.00 $720.00 $ 587.25 2. The accounting basis for the equipment. Answer is complete but not entirely correct. Accounting basis 20X6 20X7 20X8 $1,380.00 $1,380.00 $1,380.00 3. The cumulative amount of the temporary difference relating to the equipment. Answer is complete but not entirely correct. Temporary difference $ 20X6 975.00 20X7 20X8 $ 651.00 $ 793.00 4. The balance of deferred income tax asset or liability that would be reported on the statement of financial position. Answer is complete but not entirely correct. Deferred income tax balance 20X6 20X7 20X8 $ 351.00 $234.00 $285.00 3. The amount of the deferred income tax adjustment. Answer is complete but not entirely correct. 20X6 20X7 20X8 Deferred income tax Adjustment $ 351.00 (117.00) $ 51.00
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