Davis Company began manufacturing operations on January 2, 2015. During 2015 Davis earned pre-tax book income of $85,000 and had taxable income of $75,000. Davis had a temporary difference relating to a prepaid asset that will be expensed as follows for book purposes:
$$\begin{array} { l l }
2016 & \$ 7,500 \
2017 & \$ 2,500
\end{array}$$
-If no other temporary differences occurred subsequent to 2015,the deferred tax asset at the beginning of 2017 is

Question

Davis Company began manufacturing operations on January 2, 2015. During 2015 Davis earned pre-tax book income of $85,000 and had taxable income of $75,000. Davis had a temporary difference relating to a prepaid asset that will be expensed as follows for book purposes:
$$\begin{array} { l l } 
2016 & \$ 7,500 \
2017 & \$ 2,500
\end{array}$$
-If no other temporary differences occurred subsequent to 2015,the deferred tax asset at the beginning of 2017 is

Quizplus · Accepted Answer

The Answer of Davis Company began manufacturing operations on January 2, 2015. During 2015 Davis earned pre-tax book income of $85,000 and had taxable income of $75,000. Davis had a temporary difference relating to a prepaid asset that will be expensed as follows for book purposes:
$$\begin{array} { l l } 
2016 & \$ 7,500 \
2017 & \$ 2,500
\end{array}$$
-If no other temporary differences occurred subsequent to 2015,the deferred tax asset at the beginning of 2017 is

Davis Company Began Manufacturing Operations on January 2, 2015 2016$7,5002017$2,500\begin{array} { l l } 2016 & \$ 7,500 \\2017 & \$ 2,500\end{array}20162017​$7,500$2,500​

Davis Company Began Manufacturing Operations on January 2, 2015 $\begin{array} { l l } 2016 & \$ 7,500 \\2017 & \$ 2,500\end{array}$