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. Reg 1 2024 $ 210 250 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. Req 2 and 3 2025 $240 220 Cumulative temporary difference 3. Deferred tax asset 2026 $200 240 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousandse. 5.000 should be entered as 5). End of 2024 Beginning of 2024 End of 2025 End of 2026
Times-Roman Publishing Company reports the following amounts In Its first three years of operation: ($ 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. Reg 1 2024 $ 210 250 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. Req 2 and 3 2025 $240 220 Cumulative temporary difference 3. Deferred tax asset 2026 $200 240 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousandse. 5.000 should be entered as 5). End of 2024 Beginning of 2024 End of 2025 End of 2026
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
ChapterMB: Model-building Problems
Section: Chapter Questions
Problem 12M
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Transcribed Image Text:Times-Roman Publishing Company reports the following amounts In its first three years of operation:
($ in thousands)
Pretax accounting income
Taxable income
Req 2 and 3
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.
2624
$ 210
250
Cumulative temporary difference
3. Deferred tax asset
2825
$240
220
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 thousandse 5,000 should be entered as 5)
Beginning of
2024
< Req1
2026
$ 200
240
End of 2024
End of 2025
End of 2026
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