In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid $156000 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 20% in both 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred income taxes on Sheridan's balance sheet at December 31, 2025, should be a O $698800 asset. $365000 asset. O $365000 liability. O $730000 asset.
In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of $3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid $156000 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax rate is 20% in both 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred income taxes on Sheridan's balance sheet at December 31, 2025, should be a O $698800 asset. $365000 asset. O $365000 liability. O $730000 asset.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...
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Transcribed Image Text:In 2025, Sheridan Company accrued, for financial statement reporting, estimated losses on disposal of unused plant facilities of
$3650000. The facilities were sold in March 2026 and a $3650000 loss was recognized for tax purposes. Also in 2025, Sheridan paid
$156000 in premiums for a two-year life insurance policy in which the company was the beneficiary. Assuming that the enacted tax
rate is 20% in both 2025 and 2026 and that Sheridan paid $1220000 in income taxes in 2025, the amount reported as net deferred
income taxes on Sheridan's balance sheet at December 31, 2025, should be a
O $698800 asset.
O $365000 asset.
O $365000 liability.
O $730000 asset.
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