Question

Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: ($ in thousands) Situation 1 2 3 4 Taxable income $ 137 $ 319 $ 325 $ 416 Future deductible amounts 28 33 33 Future taxable amounts 28 28 56 Balance(s) at beginning of the year: Deferred tax asset 4.6 22 9.2 Deferred tax liability 4.6 4.6 The enacted tax rate is 40%. Required: For each situation, determine the following:

1	2	3	4
a.	Income tax payable currently.	$54.8selected answer correct	$127.6selected answer correct	$130.0selected answer correct	$166.4selected answer correct
b.	Deferred tax asset—balance.	$0.3selected answer incorrect	$0.0selected answer correct	$35.2selected answer incorrect	$22.4selected answer incorrect
c.	Deferred tax asset—change	$11.2selected answer incorrect	$0.0selected answer correct	$13.2selected answer incorrect	$13.2selected answer incorrect
d.	Deferred tax liability—balance.	$0.0selected answer correct	$15.8selected answer incorrect	$15.8selected answer incorrect	$0.0selected answer incorrect
e.	Deferred tax liability—change	$0.0selected answer correct	$11.2selected answer incorrect	$11.2selected answer incorrect	$22.4selected answer correct
f.	Income tax expense.

Answer 1