1. At December 31, 2011, Bren Co. had the following deferred income tax items:
A deferred income tax liability of $15,000 related to a noncurrent asset
A deferred income tax asset of $3,000 related to a noncurrent liability
A deferred income tax asset of $8,000 related to a current liability
Which of the following should Bren report in the noncurrent section of its December 31, 2011, balance sheet?
(a) A noncurrent asset of $3,000 and a noncurrent liability of $15,000.
(b) A noncurrent liability of $12,000.
(c) A noncurrent asset of $11,000 and a noncurrent liability of $15,000.
(d) A noncurrent liability of $4,000.
2. For the year ended December 31, 2011, Grim Co.’s pretax financial statement income was $200,000 and its taxable income was $150,000. The difference is due to the following:
Interest on municipal bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,000
Premium expense on keyman life insurance . . . . . . . . . . . . . . . . . . . (20,000)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Grim’s enacted income tax is 30%. In its 2011 income statement, what amount should Grim report as current provision for income tax expense?
(a) $45,000
(b) $51,000
(c) $60,000
(d) $66,000