Question

IM NOT SURE IF I AM ON THE RIGHT TRACK. HELP PLEASE.

UIK JUVLU Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: 1 $100 16 ($ in thousands) Situation 2 3 $232 $228 20 16 16 4 $308 20 44 Taxable income Future deductible amounts Future taxable amounts Balance(s) at beginning of the year: Deferred tax asset Deferred tax liability 2 4 13 2 8 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 "O" wherever applicable.) Situation 1 2 3 4 $ 25.0 $ 58.0 $ 57.0 $ 77.0 $ 75.0 $ 174.0 $ 171.0 $ 231.0 a. Income tax payable currently. b. Deferred tax asset-ending balance. c. Deferred tax asset—change. d. Deferred tax liability—ending balance. e. Deferred tax liability—change. $ 73.0 $ 0.0 $ 158.0 $ 227.0 $ 0.0 $ 0.0 f. Income tax expense. Connect - Google Chrome

Answer 1

Answer:

		Situation ( $ in thousands )
		1	2	3	4
A)	Income tax payable (Note 1 )	$ 28	$ 58	$ 57	$ 77
B)	Deferred Tax Asset- Balance (Note 2)	$ 4		$ 5	$ 5
C)	Deferred Tax Asset- Change (Note 3)	$ 2		- $8	$ 1
D)	Deferred Tax Liability- Balance (Note 4)		$ 4	$ 4	$ 11
E)	Deferred Tax Liability- Change (Note 5 )		-$4	$ 2	$ 11
F)	Income Tax Expense (Note 6)	$ 23	$ 54	$ 67	$ 87

Explanation :
Notes :
		Situation ( $ in thousands )
		1	2	3	4
1)	Income tax payable = Taxable income * Tax rate	$ 25	$ 58	$ 57	$ 77
		($ 100*25%)	($ 232*25%)	($ 228*25% )	($ 308*25%)
2)	Deferred Tax asset-Balance= Future deductible amounts * tax rate	$ 4		$ 5	$ 5
		($ 16*25%)		($ 20*25%)	($ 20*25%)
3)	Deferred Tax asset-Change= Deferred Tax asset-Balance - Deferred	$ 2		- $8	$ 1
	Tax asset at the beginning of the year	($ 4- $ 2)		($ 5- $ 13)	($ 5- $ 4 )
4)	Deferred Tax Liability-Balance= Future Taxable amounts * tax rate		$ 4	$ 4	11
			($ 16*25%)	($ 16*25%)	($ 44*25%)
5)	Deferred Tax Liability-Change= Deferred Tax Liability-Balance - Deferred		- $4	$ 2	$ 11
	Tax Liability at the beginning of the year		($ 4 - $ 8 )	($ 4- $ 2)	($ 11- $0 )
6)	Income tax expense = (Income tax payable + Deferred tax	$ 23	$ 54	$ 67	$ 87
	Liability -Change) - (Deferred Tax asset -Change )	{($ 25+0)-$ 2 )}	{($ 58- $ 4) -$ 0) }	{($ 57+$ 2)-(- $ 8))}	{($77+$ 11)-($ 1)}