Question

Question 1 Complete the following statements. In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be In a period in which a deductible temporary difference reverses, the reversal will cause taxable income to be accounting income. accounting income. 3@@ @ @ If a $56,000 balance in the Deferred Tax Asset account were calculated using a 25% rate, the underlying temporary difference would amount to $ Deferred taxes L recorded to account for permanent differences. If a taxable temporary difference originates in 2020, it causes taxable income of 2020 to be accounting income for 2020. ESO E @ If total income tax expense is $37,000 and deferred tax expense is $48,000, then the current portion of the total income tax expense is referred to as a current tax of $ If a corporation's tax return shows taxable income of $75,000 for Year 2 and a tax rate of 25%, the amount that will appear on the December 31 Year 2 SFP for "Income tax payable" if the company has made estimated tax payments of $12,000 for Year 2 will be $ An increase in the Deferred Tax Liability account on the SFP is recorded by a to the Deferred Tax Expense account. An income statement that reports current tax expense of $60,000 and a deferred tax benefit of $17,000 will report total income tax expense of $ Under ASPE, a valuation account may be used whenever it is judged to be more likely than not that a portion of a deferred tax asset realized. If the tax return shows total income taxes due for the period of $56,000 but the income statement shows total income tax expense of $48,000, the difference of $8,000 is referred to as a deferred tax If a company's income tax rate increases, the effect will be to the amount of a deferred tax liability and the amount of a deferred tax asset. The difference between the tax base of an asset or liability and its carrying amount is called a difference. Differences between accounting income and taxable income that will reverse in the future are called differences.

Answer 1

(a) Greater than

(b) less than

(c) $224,000 ($56,000/25%)

(d) are not

(e) less than

(f) benefit ($48,000-$37,000 = $11,000)

(g) $6750 [(75000*25%)-12000]

(h) Debit

(i) $43,000 (60,000-14,000)

(j) will not be

(k) benefit

(l) increase, decrease/reduce

(m) temporary, taxable temporary