Question

At December 31, 2024, Lance has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2023, Lance reported a deferred tax asset of $447,000 related to this difference in reporting warranties; it’s only temporary difference. The enacted tax rate is 25% each year.

Name: at december 31 2024 lance has a warranty liability of 2 million and taxable income of 75 million at december 31 2023 lance reported a deferred tax asset of 447000 related to this difference 05341
Uploaded: 2023-10-08T16:58:20-08:00
Duration: 3 min 8 s
Channel: Akash M
Description: at december 31 2024 lance has a warranty liability of 2 million and taxable income of 75 million at december 31 2023 lance reported a deferred tax asset of 447000 related to this difference 05341

          At December 31, 2024, Lance has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2023, Lance reported a deferred tax asset of $447,000 related to this difference in reporting warranties; it’s only temporary difference. The enacted tax rate is 25% each year.

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Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

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Solved by Expert Akash M

10/08/2023

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At December 31, 2024, Lance has a warranty liability of $2 million and taxable income of $75 million. At December 31, 2023, Lance reported a deferred tax asset of $447,000 related to this difference in reporting warranties; it’s only temporary difference. The enacted tax rate is 25% each year.