For calendar year 2007, Neer Corp. reported depreciation of $1,200,000 in its income statement. On its 2007 income tax return, Neer reported depreciation of $1,800,000. Neer's income statement also included $225,000 accrued warranty expense that will be deducted for tax purposes when paid. Neer's enacted tax rates are 30% for 2007 and 2008, and 24% for 2009 and 2010. The depreciation difference and warranty expense will reverse over the next three years as follows: These were Neer's only temporary differences. In Neer's 2007 income statement, the deferred portion of its provision for income taxes should be

Question

For calendar year 2007, Neer Corp. reported depreciation of $1,200,000 in its income statement. On its 2007 income tax return, Neer reported depreciation of $1,800,000. Neer's income statement also included $225,000 accrued warranty expense that will be deducted for tax purposes when paid. Neer's enacted tax rates are 30% for 2007 and 2008, and 24% for 2009 and 2010. The depreciation difference and warranty expense will reverse over the next three years as follows:  These were Neer's only temporary differences. In Neer's 2007 income statement, the deferred portion of its provision for income taxes should be

Quizplus · Accepted Answer

($240,000 - $45,000) × 30% = $58,500;
($210,000 - $75,000) × 24% = $32,400;
($150,000 - $105,000) × 24% = $10,800;
$58,500 + $32,400 + $10,800 = $101,700.

For Calendar Year 2007, Neer Corp