Question

Larsen Corporation reported $200,000 in revenues in its 2020 financial statements, of which $66,000 will NOT be included in the tax return until 2021. The enacted tax rate is 30% for 2020 and 25% for 2021. What amount should Larsen report for its deferred tax liability on its balance sheet at December 31, 2020

Answer 1

Answer:

$16,500

Explanation:

Larsen Corporation

$66,000×0.25=$16,500

Larsen should $16,500 report for its deferred tax liability on its balance sheet at December 31, 2020 due to the fact that $66,000 will NOT be included in the tax return until 2021 in which the enacted tax rate is 25% for 2021