Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences: SITUATION 1 2 Taxable income $44,000 $84,000 Amounts at year-end: Future deductible amounts 5,400 10,400 Future taxable amounts 0 5,400 Balances at beginning of year, dr (cr): Deferred tax asset $1,000 $3,640 Deferred tax liability 0 1,000 The enacted tax rate is 35% for both situations. Required: For each situation determine the:

situation 1 2

SITUATION(a.)Income tax payable currently.

(b.)Deferred tax asset - balance at year-end.

(c.)Deferred tax asset change dr or (cr) for the year.

(d.)Deferred tax liability - balance at year-end.

(e.)Deferred tax liability change dr or (cr) for the year.

f.)Income tax expense for the year.