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	$	152			$	284			$	332			$	464
Future deductible amounts		16								20				20
Future taxable amounts						16				16				96
Balance(s) at beginning of the year:
Deferred tax asset		2								26				4
Deferred tax liability						8				2

The enacted tax rate is 25%.

Required:
For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 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.)

Situation
		1	2	3	4
a.	Income tax payable currently.
b.	Deferred tax asset—balance.
c.	Deferred tax asset—change.
d.	Deferred tax liability—balance.
e.	Deferred tax liability—change.
f.	Income tax expense.

Answer 1

Solution:

Situation
		1	2	3	4
a.	Income tax payable currently.	$38.00	$71.00	$83.00	$116.00
b.	Deferred tax asset—balance.	$4.00	$0.00	$5.00	$5.00
c.	Deferred tax asset—change.	$2.00	$0.00	-$21.00	$1.00
d.	Deferred tax liability—balance.	$0.00	$4.00	$4.00	$24.00
e.	Deferred tax liability—change.	$0.00	-$4.00	$2.00	$24.00
f.	Income tax expense.	$36.00	$67.00	$106.00	$139.00