Blossom Company deducts insurance expense of $171000 for tax purposes in 2021, but the expense is not yet recognized for accounting purposes. In 2022, 2023, and 2024, no insurance expense will be deducted for tax purposes, but $57000 of insurance expense will be reported for accounting purposes in each of these years. Blossom Company has a tax rate of 20% and income taxes payable of $154000 at the end of 2021. There were no deferred taxes at the beginning of 2021. What is the amount of the deferred tax liability at the end of 2021?

The deferred tax liability = $65,000 - $30,800 = $34,200

Explanation:

Blossom company

Accounting principles of Accruals demands that expenses and income should be recognized in the year they occur.

If Blossom company expect these expenses to occur between 2022 and 2024, it means at 2021 it's not to be recognized. Thus, it's wrong to have deducted it from the income of that year.

In 2021 the company would have posted an income tac liability of 20% x $154,000 = $30,800

However from a tax stand point the $171,000 isn't acceptable. This it will be disallowed

The adjusted income will therefore become $154,000 + $171,000 = $325,000

And the correct tax liability = 20% x $325,000 = $65,000.

The deferred tax liability = $65,000 - $30,800 = $34,200

answer; normative economics;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.