In 2016, its first year of operations, Richmond Corporation reported pretax financial income of $80,000 for the year ended December 31. Richmond depreciates its fixed assets using an accelerated cost recovery method for tax purposes and straight-line depreciation for financial reporting. On assets acquired in 2016, the following are differences between depreciation on the tax return and accounting income during the asset's five-year life:
Assuming no other temporary or permanent differences, which of the following combinations of noncurrent deferred tax liabilitiy and income taxes payable would be included on Richmond's December 31, 2016 balance sheet?

Question

In 2016, its first year of operations, Richmond Corporation reported pretax financial income of $80,000 for the year ended December 31. Richmond depreciates its fixed assets using an accelerated cost recovery method for tax purposes and straight-line depreciation for financial reporting. On assets acquired in 2016, the following are differences between depreciation on the tax return and accounting income during the asset's five-year life:  
Assuming no other temporary or permanent differences, which of the following combinations of noncurrent deferred tax liabilitiy and income taxes payable would be included on Richmond's December 31, 2016 balance sheet?

Quizplus · Accepted Answer

The Answer of In 2016, its first year of operations, Richmond Corporation reported pretax financial income of $80,000 for the year ended December 31. Richmond depreciates its fixed assets using an accelerated cost recovery method for tax purposes and straight-line depreciation for financial reporting. On assets acquired in 2016, the following are differences between depreciation on the tax return and accounting income during the asset's five-year life:  
Assuming no other temporary or permanent differences, which of the following combinations of noncurrent deferred tax liabilitiy and income taxes payable would be included on Richmond's December 31, 2016 balance sheet?

In 2016, Its First Year of Operations, Richmond Corporation Reported