Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: ($ in thousands) Situation 1 2 3 Taxable income $85 $215 $195 $260 Future deductible amounts 15 20 20 Future taxable amounts 15 15 30 Balance(s) at beginning of the year: Deferred tax asset 9 4 Deferred tax liability The enacted tax rate is 40%. Required: For each situation, determine the: a. Income tax payable currently b. Deferred tax asset–balance c. Deferred tax asset-change (dr) cr d. Deferred tax liability-balance e. Deferred tax liability-change (dr) er f. Income tax expense 2.
Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: ($ in thousands) Situation 1 2 3 Taxable income $85 $215 $195 $260 Future deductible amounts 15 20 20 Future taxable amounts 15 15 30 Balance(s) at beginning of the year: Deferred tax asset 9 4 Deferred tax liability The enacted tax rate is 40%. Required: For each situation, determine the: a. Income tax payable currently b. Deferred tax asset–balance c. Deferred tax asset-change (dr) cr d. Deferred tax liability-balance e. Deferred tax liability-change (dr) er f. Income tax expense 2.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 22CE
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