Question

3. Multiple temporary differences. The floging nformaons avable for the first thre years of opemations for Cooper Company: Taxable Income S500,000 375,000 400,000 1. Year 2017 2018 2019 2. On January 2, 2017, heavy equipment costing $800,000 was purchased. The equipment had a life of 5 years and no salvage value. The straight-line method of depreciation is used for book purposes and the tax depreciation taken each year is listed below 2018 ax Deareciation Total $56,000 $800,000 2017 $264,000 $360,000 $120,000 On January 2, 2018, $360,000 was collected in advance for rental of a building 3. for a three-year period. The entire $360,000 was reported as taxable income in 2018, but $240,000 of the $360,000 was reported as unearned revenue at December 31, 2 018 for book purposes. The enacted tax rates are 40% for all years. 4. Instructions (a) Prepare a schedule comparing depreciation for financial reporting and tax purposes. (b) Determine the deferred tax (asset) or liability at the end of 2017. (c) Prepare a schedule of future taxable and (deductible) amounts at the end of 2018. (d) Prepare a schedule of the deferred tax (asset) and liability at the end of 2018. (e) Compute the net deferred tax expense (benefit) for 2018. (t) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2018.

Answer 1

Answer:

Compaving Depaoor financial eroandaPuvro tin ment 80o O0 0 LIRC eay value Stviqht Line 16o 000 ev ear Tax uvPo Yeav linant 264 (000 1 60100 0 2 360100 0 601 00 0 3 120 0oD 6o 000 1601000 | 561000 601 000 Total <oOf00D 8oo,o00 Depeidioo C-dina 201T

Topable Soo,๐๐๐ to jur Ve ncome befove dere ciatao 5,00 【ooot |169000 befve 264100 0 untin Depeidia t6o00o 26,0 nome 500 00D 500,00。 ao 4,000 60 ч1 pepveitįの 40-1 Tax Pote 너1,600 2 00,00 0 Ta Patable. 246 0

Yeveve d on he Buildin I ncove Dpitia LesS ent 445fOOO | 35,000 nome %ojo0D 16c,00a Dep/ich on nome AF tev Depiti dtia 315100o 3351000 5o000 134 00D able Ag Thc Tax

Tar Epper senQ F化 Deterved 201ㅋ I6o0 l'abilit 6o00 2o1 та AsSe Net De sened 251600 Effe Cvedit 5o000 Tax Erree De teved 6toob 6o00 derrenea