Thorn Corporation has deductible and taxable temporary differences. At the beginning of 2014, its deferred tax asset was $12,000, and its deferred tax liability was $17,500. The company expects its future deductible amounts to be "deductible" in 2015 and its future taxable amount to be "taxable in 2016. In 2013, Congress enacted revised tax rates for future years as follows: 2014, 30%, 2015, 32%, and 2016, 35%. At the end of 2014 Thorn had income taxes payable of $23,500, and increase in deferred tax liability of $3,000, and an ending balance in its deferred tax asset of $13,300.

Required:
Assist Thorn in completing the schedule by filling in the blanks for items related to its income taxes for 2014. Show your computation.

Question

Thorn Corporation has deductible and taxable temporary differences. At the beginning of 2014, its deferred tax asset was $12,000, and its deferred tax liability was $17,500. The company expects its future deductible amounts to be "deductible" in 2015 and its future taxable amount to be "taxable in 2016. In 2013, Congress enacted revised tax rates for future years as follows: 2014, 30%, 2015, 32%, and 2016, 35%. At the end of 2014 Thorn had income taxes payable of $23,500, and increase in deferred tax liability of $3,000, and an ending balance in its deferred tax asset of $13,300. 
 
Required:
Assist Thorn in completing the schedule by filling in the blanks for items related to its income taxes for 2014. Show your computation.

Quizplus · Accepted Answer

The Answer of Thorn Corporation has deductible and taxable temporary differences. At the beginning of 2014, its deferred tax asset was $12,000, and its deferred tax liability was $17,500. The company expects its future deductible amounts to be "deductible" in 2015 and its future taxable amount to be "taxable in 2016. In 2013, Congress enacted revised tax rates for future years as follows: 2014, 30%, 2015, 32%, and 2016, 35%. At the end of 2014 Thorn had income taxes payable of $23,500, and increase in deferred tax liability of $3,000, and an ending balance in its deferred tax asset of $13,300. 
 
Required:
Assist Thorn in completing the schedule by filling in the blanks for items related to its income taxes for 2014. Show your computation.

Thorn Corporation Has Deductible and Taxable Temporary Differences