Question

Please full the table below: The following information pertaining Juniper Corporation is available for the year ended 2015,its first year of operations: :

Pretax financial income, $200,000.

Excess of tax deprecation over book depreciation equals $36,000 in 2015 (future taxable). This temporary difference (i.e., $36,000 depreciation expense) will be reversed as follows: $23,000 in 2016 and $13,000 in 2017.

The tax rates of 2015, 2016 and 2017 are 30%, 25%, and 25%, respectively.  

Instructions:

Compute Juniper’s 2015 taxable income.

Pretax accounting income                               $ 200,000

Less: additional accelerated

depr. deducted for I/T                                     ($36,000)

Taxable Income – 2015                                  $ 164,000

Prepare a schedule to show the derivation of the deferred tax liability at the end of 2015.

	2015	2016	2017
Future taxable amounts	$36,000	$23,000	$13,000
Tax Rate	30%	25%	25%
Deferred Ta.x Lia
Beg. Bal. of deferred tax lia.
Ending bal. of deferred tax lia
Changes in deferred tax lia

Answer 1

		Reversal
	2015	2016	2017
Future taxable amounts	36,000	23,000	13,000
Tax Rate	25%	25%	25%
Deferred Tax Liability	9,000	5,750	3,250
Beg. Bal. of deferred tax lia.	0	9,000	5,750
Ending bal. of deferred tax lia	9,000	3,250	-
Changes in deferred tax lia	9,000	5,750	5,750

Deferred Tax is calculated based on future Tax rate. So, I have corrected the rate in the 1st Column.

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