Business, 06.05.2020 05:21 blanca04fp

Isaac Inc. began operations in January 2018. For certain of its property sales, Isaac recognizes income in the period of sale for financial reporting purposes. However, for income tax purposes, Isaac recognizes income when it collects cash from the buyer's installment payments. In 2018, Isaac had $653 million in sales of this type. Scheduled collections for these sales are as follows: 2018 $ 70 million 2019 128 million 2020 126 million 2021 156 million 2022 173 million $ 653 million Assume that Isaac has a 30% income tax rate and that there were no other differences in income for financial statement and tax purposes. Suppose that, in 2019, legislation revised the income tax rates so that Isaac would be taxed in 2020 and beyond at 40%, rather than 30%. Assume that there were no other differences in income for financial statement and tax purposes. Ignoring operating expenses and additional sales in 2019, what deferred tax liability would Isaac report in its year-end 2019 balance sheet

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Isaac Inc. began operations in January 2018. For certain of its property sales, Isaac recognizes inc...