Two independent situations are described below Each situation has future deductible amounts and or future taxable amounts produced by temporary differences The enacted state and Federal tax rate is 25 for both situations Determine the income tax expense for the year Situation 1 Situation 2 a $10,00...

Two independent situations are described below. Each situation has future deductible amounts and/or future taxable amounts produced

Question:

Two independent situations are described below. Each situation has future deductible amounts and/or future taxable amounts produced by temporary differences.

Situation 1 2 Taxable income $40,000 $80,000 Amounts at year-end: Future deductible amounts 5,000 10,000 Future taxable amounts -0- 5,000 Balances at beginning of year: Deferred tax asset 1,000 4,000 Deferred tax liability -0- 1,000