Allison Corporation (marginal tax rate of 34%)has $44,000 of tax depreciation in the current year.It also has a $40,000 bad debt deduction.For financial accounting,it has a total depreciation deduction of $28,000 and adds $50,000 to its bad debt reserve,the first year it has established a reserve.Determine if the corporation has a deferred tax asset or a deferred tax liability and its amount.

Question

Quizplus · Accepted Answer

The Answer of Allison Corporation (marginal tax rate of 34%)has $44,000 of tax depreciation in the current year.It also has a $40,000 bad debt deduction.For financial accounting,it has a total depreciation deduction of $28,000 and adds $50,000 to its bad debt reserve,the first year it has established a reserve.Determine if the corporation has a deferred tax asset or a deferred tax liability and its amount.

Allison Corporation (Marginal Tax Rate of 34%)has $44,000 of Tax