Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Pretax accounting income Taxable income 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. 2. 3. 2024 $ 340 380 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? Req 1 Req 2 and 3 2025 $ 350 330 Complete this question by entering your answers in the tabs below. Cumulative temporary difference Deferred tax asset Answer is not complete. 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). 2026 $ 310 350 Beginning of 2024 End of 2024 End of 2025 End of 2026
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in thousands) Pretax accounting income Taxable income 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. 2. 3. 2024 $ 340 380 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? Req 1 Req 2 and 3 2025 $ 350 330 Complete this question by entering your answers in the tabs below. Cumulative temporary difference Deferred tax asset Answer is not complete. 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). 2026 $ 310 350 Beginning of 2024 End of 2024 End of 2025 End of 2026
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
min.4
Transcribed Image Text:Times-Roman Publishing Company reports the following amounts in its first three years of operation:
($ in thousands)
Pretax accounting income
Taxable income
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.
2.
3.
2024
$ 340
380
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?
Req 1
Req 2 and 3
2025
$ 350
330
Complete this question by entering your answers in the tabs below.
Cumulative temporary difference
Deferred tax asset
X Answer is not complete.
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).
2026
$310
350
Beginning
of 2024
End of
2024
End of
2025
End of
2026
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