At December 31, 2010, Chloe Corporation had a temporary difference (related to pensions) and reported a related future tax asset of $40,000 on its balance sheet. At December 31, 2011, Chloe has five temporary differences. An analysis reveals the following:

The enacted tax rate has been 40% for many years. In November 2011, the rate was changed to 38% for all periods after January 1, 2013. Assume that the company has income taxes due of $180,000 on the 2012 tax return and Chloe follows the PE GAAP future income taxes method.
Instructions
(a) Indicate how future income taxes should be presented on Chloe Corporation€™s December 31, 2011 balance sheet.
(b) How would your response to (a) change if Chloe reported under IFRS?
(c) Calculate taxable income for 2011.
(d) Calculate accounting income for 2011.
(e) Draft the income tax section of the 2011 income statement, beginning with the line €œIncome before income taxes.€ Provide as much information as possible about the components of income tax expense.

Future (Taxable) Deductible Amounts 2013 Temporary Difference 1. Pension liability: expensed as incurred on the books; 2012 2014 20,000 $10,000 2. Royalties collected in advance: recognized when earned 3. Accrued liabilities: various expenses accrued for accounting 4. Deferred gross profit: profits recognized on instalment sales 5. Equipment: straight-line depreciation for accounting purposes, deductible when funded for tax purposes for accounting purposes and when received for tax purposes purposes and recognized for tax purposes when paid when sold for book purposes, and as collected for tax purposes and CCA for tax purposes $30,000 76,000 24,000 (36,000) (90,000) $4,000 (36,000) (36,000) (50,000) $(66,000) (40,000) $(66,000)