Chapter 18, Problem 7E

1.

To determine

Prepare journal entry to record the tax expense, tax payable and deferred tax for the year 2016.

2.

To determine

Prepare journal entry to record the tax expense, tax payable and deferred tax for the year.

3.

To determine

Elaborate the circumstances that necessitate the utilization of valuation allowance account when deferred tax is recognized and show the manner for reporting the account in financial statements.

4.

To determine

Comment on the answer provided by requirement 2, assuming that Company Z prepares financial statements using IFRS.