Computation of Deferred Taxes
Let’s look at another example:
SK Company has two temporary differences at the end of 1996:
Installment sales (taxable amounts) due to reverse according the following schedule: (enacted rates for 96-98, 30%; 99-00, 40%)
1997 $30,000 times enacted rate (.3) = $ 9,000
1998 $40,000 times enacted rate (.3) = $12,000
1999 $60,000 times enacted rate (.4) = $24,000
2000 $80,000 times enacted rate (.4) = $32,000
*What is this amount? What is its nature?