Question

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: (5 in thousands) Situation 2 3 $149 $343 $355 452 36 31 31 62 Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability 5.2 .2 5. 25 25 5.2 10.4 5.2 The enacted tax rate is 40%. Required: For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place fie. 1.200 should be entered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.). Answer is not complete. Situation Income tax payable currently Deferred tax asset-balance Deferred tax asse-change Deferred tax liability-balance Deferred to ability change $ 596513725 1420 $ 1808 $ 124 $ 144S 1440 $ 72 $(106) $ 4 $ 124 S 124 $ 248 $ 720 $ 725 248 5. 7925144 45 165 45 2096 Income tax expense

Answer 1

Answer Situation 3 2 Income tax payable currently Deferred tax assets - balance Deferred tax assets - change Deferred tax liability - balance Deferred tax liability - change Income tax expense $59.6 $12.4 $7.2 $0.0 $0.0 $52.4 $137.2 $0.0 $0.0 $12.4 $7.2 $144.4 $142.0 $14.4 ($10.6) $12.4 $180.8 $14.4 $4.0 $24.8 $24.8 $201.6 e $7.2 $159.8

Explanations ($ in thousands) a Taxable income Tax Rate Income tax payable $149 40% $59.6 Situation 23 $343 $355 40% 40% $137.2 $142.0 $452 40% $180.8 b Future deductible amounts Tax Rate Deferred tax assets - balance Beginning of the year c Deferred tax assets: (dr) cr ($31) 40% ($12.4) $5.2 ($7.2) 40% $0.0 ($36) 40% ($14.4) $25.0 $10.6 ($36) 40% ($14.4) $10.4 ($4.0) $0.0 d Future taxable amounts Tax Rate Deferred tax liability - bal $31 40% $12.4 $31 40% $12.4 $62 40% $24.8 40% $0.0 $0.0 $0.0 Beginning of the year: Deferred tax liability: (dr) cr $5.2 $7.2 $5.2 $7.2 $0.0 $24.8 f Income tax payable currently Deferred tax assets: (dr) cr Deferred tax liability: (dr) cr Income tax expense $59.6 ($7.2) $0.0 $52.4 $137.2 $0.0 $7.2 $144.4 $142.0 $10.6 $7.2 $159.8 $180.8 ($4.0) $24.8 $201.6