E$18\mathrm{.}7($LO $1,2)($Terminology$,$ Relationships, Computations, Entries$)$

Instructions

Complete the following statements by filling in the blanks.

In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be $\_\_\_\_\_\_\_\_\_\_($less than, greater than$)$ pretax financial income.

If a $$38,000$ balance in Deferred Tax Asset was computed by use of a $20\%$ rate, the underlying cumulative temporary difference amounts to $$\_\_\_\_\_\_\_\_\_\_.$

Deferred taxes $\_\_\_\_\_\_\_\_\_\_($are$,$ are not$)$ recorded to account for permanent differences.

If a taxable temporary difference originates in $2025,$ it will cause taxable income for $2025$ to be $\_\_\_\_\_\_\_\_\_\_($less than, greater than$)$ pretax financial income for $2025.$

If total tax expense is $$50,000$ and deferred tax expense is $$65,000,$ then the current portion of the expense computation is referred to as current tax $\_\_\_\_\_\_\_\_\_\_($expense$,$ benefit$)$ of $$\_\_\_\_\_\_\_\_\_\_.$

If a corporation$$s tax return shows taxable income of $$100,000$ for Year $2$ and a tax rate of $20\%,$ how much will appear on the December $31,$ Year $2,$ balance sheet for $$Income taxes payable$$ if the company has made estimated tax payments of $$18,250$ for Year $2?$ $$\_\_\_\_\_\_\_\_\_\_.$

An increase in the Deferred Tax Liability account on the balance sheet is recorded by a $\_\_\_\_\_\_\_\_\_\_($debit$,$ credit$)$ to the Income Tax Expense account.

An income statement that reports current tax expense of $$82,000$ and deferred tax benefit of $$23,000$ will report total income tax expense of $$\_\_\_\_\_\_\_\_\_\_.$

A valuation account is needed whenever it is judged to be $\_\_\_\_\_\_\_\_$ that a portion of a deferred tax asset $\_\_\_\_\_\_\_\_($will be$,$ will not be$)$ realized.

If the tax return shows total taxes due for the period of $$75,000$ but the income statement shows total income tax expense of $$55,000,$ the difference of $$20,000$ is referred to as deferred tax $\_\_\_\_\_\_\_\_\_\_($expense$,$ benefit$).$