Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts producedby temporary differences:Taxable incomeFuture deductible amountsFuture taxable amountsBalance(s) at beginning of the year:Deferred tax assetDeferred tax liability.The enacted tax rate is 25%.a. Income tax payable currently.b. Deferred tax asset-ending balance.c. Deferred tax asset-change.d. Deferred tax liability-ending balance.e. Deferred tax liability-change.f. Income tax expense.1¹12 ³$132 $264 $29216|($ in thousands)Situation21628Required:For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should beentered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.)Situation201632124|$404207644

Solution: Income tax payable = Taxable income * Tax rate Income tax expense = Income tax payable…

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability The enacted tax rate is 25%. $132 16 2 ($ in thousands) Situation 3 $264 $292 20 16 16 8 21 2 4 $404 20 76 4 Required: For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.)

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability The enacted tax rate is 25%. $132 16 2 ($ in thousands) Situation 3 $264 $292 20 16 16 8 21 2 4 $404 20 76 4 Required: For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.)

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 7C

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Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxes
Temporary and Permanent Differences In the current year, you are calculating a diversified companys deferred taxes. Based on an analysis of the companys current taxable income and pretax financial income, you have identified the following items that create differences between the two amounts and that may result in differences between the companys future taxable income and its nature pretax financial income: Required: For each difference, indicate whether it is a temporary difference (T) or a permanent difference (P) by placing the appropriate letter on the line provided. If the difference is a temporary difference, also indicate for the current year whether it will result in a future taxable amount (FT) or a future deductible amount (FD).
Four Independent situations are described below. Each Involves future deductible amounts and/or future taxable amounts produced by temporary differences: Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability a. Income tax payable currently. b. Deferred tax asset-ending balance. c. Deferred tax asset-change. d. Deferred tax liability-ending balance. 1 $ 88 16 e. Deferred tax liability-change. f. Income tax expense. 2 ($ in thousands) Situation 2 2 $ 220 16 8 The enacted tax rate is 25% Required: For each situation, determine the following: Note: Enter your answers in thousands rounded to one decimal place (l.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable. Situation 3 $ 204 20 16 3 10 2 4 $ 272 20 32 4
Subject: acounting
Eight Independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: 1. 2. 3. 5. 6. 7. 2 The Income Statement Revenue 3 4 5 6 7 8 ($ in millions) Temporary Differences Reported First on: The Tax Return $24 19 19 19 Expense $24 Situations Taxable Income 1 24 24 24 24 Revenue $24 19 9 Expense Required: For each situation, determine taxable income, assuming pretax accounting income is $140 million. (Enter your answers in millions (I.e., 10,000,000 should be entered as 10).) $24 14 14
Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability ($ in thousands) Situation 1 2 3 $92 $224 $212 $284 16 20 20 16 16 36 2 11 4 8 2 The enacted tax rate is 25%. Required: For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.) Show Transcribed Text a. Income tax payable currently. b. Deferred tax asset-balance. c. Deferred tax asset-change. d. Deferred tax liability-balance. e. Deferred tax liability-change. f. Income tax expense. 2 J Situation 2 3
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Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: ($ in thousands) Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability The enacted tax rate is 25%. Situation 1 2 3 4 $ 84 $ 216 $ 196 $ 260 16 20 20 16 16 28 2 8 06 9 4 2
Eight independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: ($ in millions) Temporary Differences Reported First on: The Income Statement The Tax Return Revenue Expense Revenue Expense 1. $40 2. $40 3. $40 4. $40 5. 35 40 6. 40 35 7. 35 40 30 8. 35 40 25 30 Required:For each situation, determine taxable income, assuming pretax accounting income is $300 million.
Eight independent situations are described below. Each involves future deductible amounts and/or future taxable amounts: ($ in millions) Temporary Differences Reported First on: The Income Statement Revenue The Tax Return Expense $29 Revenue Вхрense 1. 2. $29 3. $29 4. $29 5. 6. 7. 8. 24 29 29 29 24 24 19 19 24 29 14 Required: For each situation, determine taxable income, assuming pretax accounting income is $190 million. (Enter'your answers in millions (I.e., 10,000,000 should be entered as 10).) Situations Taxable Income 1 4. 5. 6. 8
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