Temporary difference; taxable income given
Response to the following problem:
Alvis Corporation reports pretax accounting income of $400,000, but due to a single temporary difference, taxable income is only $250,000. At the beginning of the year, no temporary differences existed.
Required:
1. Assuming a tax rate of 35%, what will be Alvis's net income?
2. What will Alvis report in the balance sheet pertaining to income taxes?