Jurgen Company's income tax return shows income taxes for 2010 of $75,000 (that is,$75,000 is owed for 2010).For financial reporting,the firm reports deferred tax assets of $67,900 at the beginning of 2010 and $63,600 at the end of 2010.It reports deferred tax liabilities of $53,600 at the beginning of 2010 and $59,400 at the end of 2010.
Required:
a.Compute the amount of income tax expense for 2010.
b.Assume for this part that the firm's deferred tax assets are as stated above for 2010 but that its deferred tax liabilities were $83,500 at the beginning of 2010 and $72,100 at the end of 2010.Compute the amount of income tax expense for 2010.
c.Explain contextually why income tax expense is higher than taxes owed in Part a and lower than taxes owed in Part b.

Question

Jurgen Company's income tax return shows income taxes for 2010 of $75,000 (that is,$75,000 is owed for 2010).For financial reporting,the firm reports deferred tax assets of $67,900 at the beginning of 2010 and $63,600 at the end of 2010.It reports deferred tax liabilities of $53,600 at the beginning of 2010 and $59,400 at the end of 2010.
Required: 
a.Compute the amount of income tax expense for 2010.
b.Assume for this part that the firm's deferred tax assets are as stated above for 2010 but that its deferred tax liabilities were $83,500 at the beginning of 2010 and $72,100 at the end of 2010.Compute the amount of income tax expense for 2010.
c.Explain contextually why income tax expense is higher than taxes owed in Part a and lower than taxes owed in Part b.

Quizplus · Accepted Answer

The Answer of Jurgen Company's income tax return shows income taxes for 2010 of $75,000 (that is,$75,000 is owed for 2010).For financial reporting,the firm reports deferred tax assets of $67,900 at the beginning of 2010 and $63,600 at the end of 2010.It reports deferred tax liabilities of $53,600 at the beginning of 2010 and $59,400 at the end of 2010.
Required: 
a.Compute the amount of income tax expense for 2010.
b.Assume for this part that the firm's deferred tax assets are as stated above for 2010 but that its deferred tax liabilities were $83,500 at the beginning of 2010 and $72,100 at the end of 2010.Compute the amount of income tax expense for 2010.
c.Explain contextually why income tax expense is higher than taxes owed in Part a and lower than taxes owed in Part b.

Jurgen Company's Income Tax Return Shows Income Taxes for 2010