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Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Pretax accounting income Taxable income 2024 $ 390 430 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Complete this question by entering your answers in the tabs below. 2 Cumulative temporary difference 3. 2025 $ 390 370 Req 1 Req 2 and 3 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5). End of 2025 End of 2026 Beginning of 2024 $ $ < Req 1 2026 $ 350 390 End of 2024 0.0 $ 0.0 $ 40 10 Reg 2 and 3

Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Pretax accounting income Taxable income 2024 $ 390 430 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future. Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Complete this question by entering your answers in the tabs below. 2 Cumulative temporary difference 3. 2025 $ 390 370 Req 1 Req 2 and 3 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5). End of 2025 End of 2026 Beginning of 2024 $ $ < Req 1 2026 $ 350 390 End of 2024 0.0 $ 0.0 $ 40 10 Reg 2 and 3

Excel Applications for Accounting Principles
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 12M
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Times-Roman Publishing Company reports the following amounts in its first three years of operation: (s in thousands) Pretax accounting income Taxable income 2024 $ 390 430 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Complete this question by entering your answers in the tabs below. 2 Cumulative temporary difference 3. 2025 $ 390 370 Req 1 Req 2 and 3 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5). End of 2025 End of 2026 Beginning of 2024 $ $ < Req1 2026 $ 350 390 End of 2024 0.0 $ 0.0 $ 40 10 Reg 2 and 3>
Transcribed Image Text:Times-Roman Publishing Company reports the following amounts in its first three years of operation: (s in thousands) Pretax accounting income Taxable income 2024 $ 390 430 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Complete this question by entering your answers in the tabs below. 2 Cumulative temporary difference 3. 2025 $ 390 370 Req 1 Req 2 and 3 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5). End of 2025 End of 2026 Beginning of 2024 $ $ < Req1 2026 $ 350 390 End of 2024 0.0 $ 0.0 $ 40 10 Reg 2 and 3>
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