Two 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% for both situations.
Required:
For each situation determine the:
(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.

Question

Two 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% for both situations.
Required:
For each situation determine the:
(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.

Quizplus · Accepted Answer

The Answer of Two 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% for both situations.
Required:
For each situation determine the:
(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.

Two Independent Situations Are Described Below