1. Consider these four situations. Answer questions a-g. Then write out the journal entry for each.

Facts:

	SITUATIONS
	1	2	4	4
Taxable income	$125,000	$275,000	$65,000	$120,000
Total Future deductible amounts	20,000	0	18,000	12,000
Total Future taxable amounts	0	30,000	9,000	28,000
Balance BEGINNING of year:
Deferred tax asset	2,000	0	11,000	6,000
Deferred tax liability	0	2,000	3,000	15,000

Assume the tax rate is and will be 40% in all situations.

Please complete the following table and prepare journal entries for the four situations.

Hint 1: Tax Expense = Taxes Payable - Deferred tax asset + Deferred tax liability

Hint 2: Income Taxes Payable = Current Tax Expense

Hint 3: Tax Expense = Current Tax Expense + Deferred Tax Expense

	Situation 1	Situation 2	Situation 3	Situation 4
a. DTA ending balance
b. DTL ending balance
c. Income taxes payable
d. DTA change
e. DTL change
f. Income tax expense
g. Deferred tax expense