After Applying the Balance Sheet Method to Determine the GAAP

question 32

Essay

After applying the balance sheet method to determine the GAAP income tax expense of Poppert Inc., the following account balances are found. Determine the balance sheet presentation of these amounts. Hint: Which of the accounts should you combine for the final balance sheet disclosure? $$\begin{array} { l c } \text { Deferred tax assets, current } & \$ 500,000 \\\text { Deferred tax assets, noncurrent } & 145,000 \\\text { Deferred tax liabilities, current } & 80,000 \\\text { Deferred tax liabilities, noncurrent } & 310,000\end{array}$$

---

Definitions:

Net Operating Income

An indicator of a firm's profitability from standard operations, excluding non-operational income and expenses like taxes and interest.

Operations

The activities involved in running a business, production, or system effectively and efficiently.

Contribution Margin

It refers to the amount of revenue remaining after deducting variable costs, which can contribute to covering fixed costs and generating profit.

Operations

The day-to-day activities involved in running a business, focusing on creating and delivering products or services.