Problem 2: KAY Co. reported net income for the current year 2021 at 4,180,000 before taxes. Included in the determination of the said net income were: Current tax rate Non-deductible expenses Non-taxable income At the beginning of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Future taxable amount At the end of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Required: 30% 84,000 ℗ 205,000 1,110,000 ℗ 567,000 720,000 ▸ 632,000 9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position? 10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?

Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax income from continuing operations (of which revenues are 295,000), the following items are included in this pretax income: Colts taxable income totals 93,000 in 2019. The difference between the pretax financial income and the taxable income is due to the excess of tax depreciation over financial depreciation on assets used in continuing operations. At the beginning of 2019, Colt had a retained earnings balance of 310.000 and a deferred tax liability of 8,100. During 2019, Colt declared and paid dividends of 48,000. It is subject to tax rates of 15% on the first 50,000 of income and 30% on income in excess of 50,000. Based on proper interperiod tax allocation procedures, Colt has determined that its 2019 ending deferred tax liability is 14,100. Required: 1. Prepare a schedule for Colt to allocate the total 2019 income tax expense to the various components of pretax income. 2. Prepare Colts income tax journal entry at the end of 2019. 3. Prepare Colts 2019 income statement. 4. Prepare Colts 2019 statement of retained earnings. 5. Show the related income tax disclosures on Colts December 31, 2019, balance sheet.

Interperiod Tax Allocation Peterson Company has computed its pretax financial income to be 66,000 in 2019 after including the effects of the appropriate items from the following information: Petersons accountant has prepared the following schedule showing the future taxable and deductible amounts at the end of 2019 for its three temporary differences: At the beginning of 2019, Peterson had a deferred tax liability of 12,540 related to the depreciation difference and 4,710 related to the accrual-basis sales difference. In addition, it had a deferred tax asset of 14,850 related to the warranty difference. The current tax rate is 30%, and no change in the tax rate has been enacted for future years. Required: 1. Compute Petersons taxable income for 2019. 2. Prepare Petersons income tax journal entry for 2019 (assume no valuation allowance is necessary). 3. Next Level Identify the permanent differences in Items 1 through and explain why you did or did not account for them as deferred tax items in Requirement 2.

Problem 2: KAY Co. reported net income for the current year 2021 at P4,180,000 before taxes. Included in the determination of the said net income were: Current tax rate 30% P 84,000 P 205,000 Non-deductible expenses Non-taxable income At the beginning of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating Future taxable amount P 1,110,000 P 567,000 At the end of the year: Cumulative temporary difference creating future deductible amount Cumulative temporary difference creating P 720,000 P 632,000 Required: 9. What is the total deferred tax asset to be presented in the 2021 Statement of Financial Position? 10. What is the total deferred tax liability to be presented in the 2021 Statement of Financial Position?