The beginning prepaid insurance balance for a firm is $80,000. The tax rate is 30% and...

The beginning prepaid insurance balance for a firm is $80,000. The tax rate is 30% and the beginning DTL balance therefore is $24,000. During the year, $60,000 of insurance expense was recognized and $20,000 of insurance was prepaid at year-end. What is the ending DTL balance if the tax rate in future years was changed to 20% in the current year?

20,000

16,000

4,000

8,000

12,000

Expert Solution

DTL ending balance should be = Ending Balance of Prepaid Insurance x Tax Rate in the Current year = $20,000 * 20% = $4,000

ekkarill92 answered 2 years ago

The prepaid insurance account had a balance of $7,000 at the beginning of the year

Adjusting Entries for Prepaid InsuranceThe prepaid insurance account had a balance of $7,000 at the beginning of the year. The account was debited for $24,000 for premiums on policies purchased during the year. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment:a. The amount of unexpired insurance applicable to future periods is $8,500.Insurance ExpensePrepaid Insuranceb. The amount of insurance expired during the year is $22,500.Insurance ExpensePrepaid Insurance

The Prepaid Insurance account has a normal balance of $5,625 at the beginning of the month....

The Prepaid Insurance account has a normal balance of $5,625 at the beginning of the month. The company used $1,470 of insurance coverage during the month. Which of the following statements is correct? The company should credit Insurance Expense for $1,470 and debit Prepaid Insurance for $1,470. Retained earnings will decrease and stockholders' equity will increase. The company should debit Insurance Expense for $1,470 and credit Prepaid Insurance for $1,470. Retained earnings and stockholders' equity will both increase.

Prepaid insurance is reported on the balance sheet as a

Prepaid insurance is reported on the balance sheet as a fixed asset current asset long-term liability current liability

the prepaid balance in the prepaid insurance account represent the remaining balance of two year policy...

the prepaid balance in the prepaid insurance account represent the remaining balance of two year policy purchased in April 2010 trial balance unjusted 31 October 2011 prepaid insurance 9350 the office furniture was purchased in March 1 2010 and has estimated useful life of two years of use it is expected that the furniture will be worthless office furniture October 31 2011 unjusted trial balance 61440 what are the adjustments t for this two transactions

The balance in the prepaid insurance account, before adjustment at the end of the year, is...

The balance in the prepaid insurance account, before adjustment at the end of the year, is $27,000. Journalize the adjusting entry required under each of the following alternatives for determining the amount of the adjustment: a. The amount of insurance expired during the year is $20,250. * Insurance expense = $20,250 * Prepaid Insurance = ? b. The amount of unexpired insurance applicable to future periods is $6,750. * Insurance expense = ? * Prepaid Insurance = $20,250

Suppose the corporate tax rate is 30 %30%. Consider a firm that earns $ 3 comma...

Suppose the corporate tax rate is 30 %30%. Consider a firm that earns $ 3 comma 000$3,000 in earnings before interest and taxes each year with no risk. The firm's capital expenditures equal its depreciation expenses each year, and it will have no changes to its net working capital. The risk-free interest rate is 7 %7%. a. Suppose the firm has no debt and pays out its net income as a dividend each year. What is the value of the...

on the end-of-period spreadsheet, prepaid insurance has a balance of $2400 in the unadjusted trail balance...

on the end-of-period spreadsheet, prepaid insurance has a balance of $2400 in the unadjusted trail balance debit column and an adjustment of $200 in the adjustments credit column. what amount should appear for prepaid insurance in the adjusted trail balance column and ultimately the balance sheet?

At the beginning of 2003, Firm X paid $80,000 for a piece of property with 1,000...

At the beginning of 2003, Firm X paid $80,000 for a piece of property with 1,000 acres of timber. The firm estimated that a total of 30,000 trees could ultimately be removed from this site. They estimated that the land could be sold for $10,000 after completion of the project. During 2003, Firm X spent $150,000 on labor to help with the cutting and treatment of the timber (intangible development cost). It also purchased a piece of equipment for $20,000...

A firm reports Net Income of $21,000 with a tax rate of 30%. It pays interest...

A firm reports Net Income of $21,000 with a tax rate of 30%. It pays interest in the amount of $10,000. Its net profit margin is 7% and its costs are $160,000, not including depreciation. Calculate depreciation. Calculate the operating cash flow. The firm’s last balance sheet showed net fixed assets of $500,000 and the current balance sheets shows net fixed assets of $500,000. What was the company’s net capital spending this year?

unadjusted trial balance pre- paid rent 3000 prepaid advertising 6000 prepaid insurance 3250 need to adjust...

unadjusted trial balance pre- paid rent 3000 prepaid advertising 6000 prepaid insurance 3250 need to adjust trail balance using following entry 15 days of rent remained pre-paid at the start of June. 3 months of advertising remained pre-paid at the start of June. 5 months of insurance remained pre-paid at the start of June. cal

Question