Use the information below to answer the questions that follow.
Loss reserve discount $12,500
20% of net unearned premium reserve 2,500
unrealized gains on investments 25,000
accrual of market discount not for tax purpose 5,000
deferred acquisition costs 18,000
effective tax rate is 35%
calculate the net deferred tax assets (liabilities). show all work.
DTA = 0.35 * (12,500-(18,000 - 2,500) - 25,000 - 5,000)
= -11,500
Could anyone explain to me the logic behind the calculation steps? Thanks in advance.
Loss reserve discount $12,500
20% of net unearned premium reserve 2,500
unrealized gains on investments 25,000
accrual of market discount not for tax purpose 5,000
deferred acquisition costs 18,000
effective tax rate is 35%
calculate the net deferred tax assets (liabilities). show all work.
DTA = 0.35 * (12,500-(18,000 - 2,500) - 25,000 - 5,000)
= -11,500
Could anyone explain to me the logic behind the calculation steps? Thanks in advance.
Deferred Tax Assets calculation 2009 Q38
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