Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. ajax products, inc., reported an excess of warrant

Ajax Products, Inc., reported an excess of warranty expense over warranty deductions of $72,000 for the...

Free

60.1K

Verified Solution

Question

Accounting

Ajax Products, Inc., reported an excess of warranty expense overwarranty deductions of $72,000 for the year ended December 31,2020. This temporary difference will reverse in equal amounts of$24,000 in years 2021, 2022, and 2023. The enacted tax rates are asfollows: 2020: 40%; 2021: 25%; 2022: 21%; 2023: 20%. The reportingfor this temporary difference at December 31, 2020, would be a

Question 4 options:

deferred tax liability of $15,840.

deferred tax liability of $28,800.

deferred tax asset of $28,800.

deferred tax asset of $15,840.

Answer & Explanation Solved by verified expert
3.8 Ratings (319 Votes)

Year Reversal amount Tax rate Deferred Tax assets $
2021                   24,000 25%                              6,000
2022                   24,000 21%                              5,040
2023                   24,000 20%                              4,800
Total                   72,000                            15,840
Correct answer is option 4.

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Psychology
1.2K views

In what specific ways is the social environment related to health and illness in this country?...

Advance Math
1.2K views

Large semitrailer trucks cost ?$75 comma 000 each. A trucking company buys such a truck and...

General Management
1.2K views

Does a regulatory institution need to be in place to control sports leagues (think about issues...

Biology
1.2K views

Read the statement DNA is a nucleic acid made of building blocks called nucleotides Which...

Physics
1.2K views

R y CO IL120 R 1 vooroo www 2 ashss A St sblatio trw bo...

Geometry
1.2K views

f x x 2 The vertical stretch by 2 then the vertical shift up by...

Basic Math
1.2K views

Verify that x = -4, y = 4, z = -2 is a solution of...

Accounting
1.2K views