Complete the following statements by filling in the blanks. a. In a period in which a taxable

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Complete the following statements by filling in the blanks.

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 $38,000 balance in Deferred Tax Asset was computed by use of a 20% 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 $50,000 and deferred tax expense is $65,000, 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 $100,000 for Year 2 and a tax rate of 20%, 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 $18,250 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 $82,000 and deferred tax benefit of $23,000 will report total income tax expense of $ _________.

i. A valuation account is needed whenever it is judged to be _________ 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 $75,000 but the income statement shows total income tax expense of $55,000, the difference of $20,000 is referred to as deferred tax _________ (expense, benefit).

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
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Intermediate Accounting

ISBN: 978-1119503668

17th edition

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel

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