PROBLEM: Consider Otis Optics from Q1096. Otis recorded $500,000 in sales revenue in 2018. The…

PROBLEM: Consider Otis Optics from Q1096. Otis recorded $500,000 in sales revenue in 2018. The company is subject to a 35% tax rate. Otis recorded a deferred tax asset of $38,500 in 2018 because of a $110,000 basis difference in warranty liabilities ($110,000 * 35%). Based on its assessment of all positive and negative evidence associated with this deferred tax asset, management has assessed that it is more likely than not that it will not realize 40% of the deferred tax asset. Ignore cost of goods sold. What are the necessary journal entries to record the deferred tax asset and valuation allowance? Prepare a partial 2018 income statement and balance sheet for Otis Optics and compare it with the financial statements from Example 17.6 that do not include a valuation allowance. What is the effective tax rate in the two examples? Provide the footnote reconciliation of the federal statutory income tax rate to the effective tax rate in both dollars and percentages, incorporating the use of the valuation allowance.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!