At the end of its third year of operations, December 31,2005, Delilah Corp. is reporting pre-tax book income of $223,000. The following items are relevant to Delilah's deferred tax computations:
a. A $55,000 unrealized holding gain on its trading securities. This gain is not recognized for tax purposes until the securities are sold.
b. Bad debt expense of $24,000 was recorded on its accounts receivable, although during 2005 no actual write-offs took place.
c. during 2005, Delilah received $19,000 cash from one of its customers. The payment received relates to a product that will be completed and delivered to the customer in late January 2006. Delilah is subject to a 40% corporate tax rate.
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