Maria Rodriquez and Lynette Kingston are discussing accounting for income taxes. They are currently studying a schedule

Question:

Maria Rodriquez and Lynette Kingston are discussing accounting for income taxes. They are currently studying a schedule of taxable and deductible amounts that will arise in the future as a result of existing temporary differences. The schedule is as follows.

Instructions

a. Explain the concept of future taxable amounts and future deductible amounts as illustrated in the schedule.

b. How do the carryforward provisions affect the reporting of deferred tax assets and deferred tax liabilities?

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Intermediate Accounting IFRS

ISBN: 9781119607519

4th Edition

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

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Question Posted: Aug 03, 2021 02:46 AM

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Maria Rodriquez and Lynette Kingston are discussing accounting for income taxes. They are currently studying a schedule

Question:

Current Year Future Years 2022 2023 2024 2025 2026 Taxable income €850,000 Taxable amounts €375,000 €375,000 €375,000 €375,000 Deductible |(2,400,000) amounts Enacted tax rate 50% 45% 40% 35% 30%

Step by Step Answer:

a Future taxable amounts refer to income that will be subject to taxation in future years In the exa...View the full answer

Intermediate Accounting IFRS

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