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NEED ANSWERS TO RED BOXES Exercise 19-18 During 2014, Kate...

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Accounting

NEED ANSWERS TO RED BOXES

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Exercise 19-18 During 2014, Kate Holmes Co.'s first year of operations, the company reports pretax financial income at $269,500. Holmes's enacted tax rate is 45% for 2014 and 4090 for all later years. Holmes expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2014, are summarized as follows. Future Years 2015 2016 2017 2018 2019 Total Future taxable (deductible) amounts: $48,200 $48,200 $48,200 Installment sales Depreciation Unearned rent $144,600 8,1008,100 8,100 $8,100 $8,100 40,500 (57,200 ) (57,200 ) (114,400) Your answer is partially correct. Try again. (a) Complete the schedule below to compute deferred taxes at December 31, 2014. Deferred Tax Future Taxable Deductible) Amounts Temporary Difference Tax Rate (Asset) Liability $144,600 40,500 (114,400) Installment sales 57840 40 7o 40% 40 1% Depreciation 16200 Unearned rent 45760 Totals 45760 74040

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