Business, 12.03.2020 20:01 Sydney012618

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

SITUATION 1 2
Taxable income $33,000 $73,000

Amounts at year-end:
Future deductible amounts 4,300 11,700
Future taxable amounts 0 4,300

Balances at beginning of year, dr (cr):
Deferred tax asset $1,000 $4,095
Deferred tax liability 0 1,000

Required:

For each situation determine the:

SITUATION 1 2
a. Income tax payable currently
b. Deferred tax asset - balance at year-end.
c. Deferred tax asset change dr or (cr) for the year.
d. Deferred tax liability-balance at year-end.
e. Deferred tax liability change dr or (cr) for the year.
f. Income tax expense for the year.

Answers: 1

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