Question

Complete the following statements by filling in the blanks.

The bolded words in between the slashes are options. One will be correct.

The bolded $ ???? are supposed to be filled in with a numerical value

please show word, i have a test coming up and im very confused!

a.		In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be less than / greater than pretax financial income.
b.		If a $74,900 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $ ????
c.		Deferred taxes are / are not recorded to account for permanent differences.
d.		If a taxable temporary difference originates in 2020, it will cause taxable income for 2020 to be less than / greater than pretax financial income for 2020.
e.		If total tax expense is $49,700 and deferred tax expense is $67,900, then the current portion of the expense computation is referred to as current tax                                                           expense / benefit of $ ????.
f.		If a corporation’s tax return shows taxable income of $102,100 for Year 2 and a tax rate of 40%, how much will appear on the December 31, Year 2, balance sheet for “Income taxes payable” if the company has made estimated tax payments of $37,100 for Year 2? $ ????.
g.		An increase in the Deferred Tax Liability account on the balance sheet is recorded by a debit / credit to the Income Tax Expense account.
h.		An income statement that reports current tax expense of $82,400 and deferred tax benefit of $22,300 will report total income tax expense of $ ????.
i.		A valuation account is needed whenever it is judged to be more likely than not/ equally likely that a portion of a deferred tax asset will be / will not be realized.
j.		If the tax return shows total taxes due for the period of $72,300 but the income statement shows total income tax expense of $55,500, the difference of $16,800 is referred to as deferred tax expense / benefit.

Answer 1

a. Greater Than Pretax financial income

b. $74900 / 40% = $187250

c. Deferred Taxes are not recorded to account for permanent differences

d. Less than pretax financial income

e. Current tax benefit of $18200

f. Income tax payable = taxable income * tax rate - taxes paid = $102100 * 40% - $37100= $3740

g. Debit to Income tax expense

h. Total Income tax expense = 82400 - 22300 = $60100

i.

A valuation account is needed whenever it is judged to be more likely than no that a portion of a deferred tax asset will not be realized.

j.  

If the tax return shows total taxes due for the period of $72,300 but the income statement shows total income tax expense of $55,500, the difference of $16,800 is referred to as deferred tax benefit.