Business, 10.03.2020 00:53 blackchina71

You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide input on the company's income tax position based on the following:

1. Pretax accounting income was $48 million and taxable income was $14 million for the year ended December 31, 2021.
2. The difference was due to three items:

a. Tax depreciation exceeds book depreciation by $30 million in 2021 for the business complex acquired that year. This amount is scheduled to be $60 million in 2022 and to reverse as ($60 million) and ($30 million) in 2023 and 2024, respectively.
b. Insurance of $8 million was paid in 2021 for 2022 coverage.
c. A $4 million loss contingency was accrued in 2021, to be paid in 2023.

3. No temporary differences existed at the beginning of 2021.
4. The tax rate is 25%.

Required:
i. Determine the amounts necessary to record income taxes for 2009 and prepare the appropriate journal entry.
ii. How should the deferred tax amounts be classified in a classified balance sheet?

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You are the new accounting manager at the Barry Transport Company. Your CFO has asked you to provide...

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