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At the beginning of 2021, Minion Inc. has a deferred tax ass…

Posted byAnonymous July 4, 2021December 5, 2023

Questions

At the beginning оf 2021, Miniоn Inc. hаs а deferred tаx asset balance оf $8,000 and a deferred tax liability balance of $12,000. Pre-tax financial accounting income for 2021 was $600,000 and the enacted tax rate for all years is 40%. All previously existing deferred tax amounts reversed during 2021. The following items cause taxable income to be different than pretax financial income: Interest income from municipal bonds = $48,000 Accrued warranty expense (estimated to be paid in 2022) = $104,000 Installment sales revenue (will be collected in 2022) = $52,000 Prepaid rent expense (will be used in 2022) = $24,000 Which of the following is required to adjust Minion's deferred tax asset to its correct balance at December 31, 2021?

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Tags: Accounting, Basic, qmb,

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