Deferred tax asset, 12/31/19...........................................................

$59,000
Deferred tax asset, 12/31/18........................................................... 30,000
Deferred tax benefit for 2019.........................................................
(29,000)
Current tax expense for 2019........................................................ 61,000
Total tax expense for 2019............................................................. $32,000
LO: 1,2, Bloom: AP, Difficulty: Simple, Time: 5-10, AACSB: Analytic, AICPA BB: Critical Thinking, AICPA FC: Reporting, AICPA PC: Problem Solving

7. To find the new level of fixed assets, we need to find the current percentage of fixed assets to full
capacity sales. Doing so, we find:

Fixed assets / Full capacity sales = $440,000 / $578,947 Fixed assets / Full capacity sales = .76

Next, we calculate the total dollar amount of fixed assets needed at the new sales figure.

Total fixed assets = .76($630,000) Total fixed assets = $478,800

The new fixed assets necessary is the total fixed assets at the new sales figure minus the current level of
fixed assts.

New fixed assets = $478,800 – 440,000 New fixed assets = $38,800

18. We have all the variables to calculate ROE using the DuPont identity except the profit margin. If we
(a) Its revenue (including both sales to external customers and intersegment sales or transfers)
is 10% or more of the combined revenue (sales to external customers and
intersegment sales or transfers) of all the company’s operating segments.
(b) The absolute amount of its operating profit or operating loss is 10% or more of the
greater, in absolute amount, of
1. the combined operating profit of all operating segments that did not incur an
operating loss, or
2. the combined loss of all operating segments that did incur loss.
(c) Its identifiable assets are 10% or more of the combined identifiable assets of all
segments.