Chapter 16, Problem 16.8E

Calculate income tax amounts under various circumstances

• LO16–1, LO16–2

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:

The enacted tax rate is 40%.

Required:

For each situation, determine the:

a. Income tax payable currently

b. Deferred tax asset—balance

c. Deferred tax asset—change (dr) cr

d. Deferred tax liability—balance

e. Deferred tax liability—change (dr) cr

f. Income tax expense