Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts producedby temporary differences:Taxable incomeFuture deductible amountsFuture taxable amountsBalance(s) at beginning of the year:Deferred tax assetDeferred tax liability.The enacted tax rate is 25%.a. Income tax payable currently.b. Deferred tax asset-ending balance.c. Deferred tax asset-change.d. Deferred tax liability-ending balance.e. Deferred tax liability-change.f. Income tax expense.1¹12 ³$132 $264 $29216|($ in thousands)Situation21628Required:For each situation, determine the following: (Enter your answers in thousands rounded to one decimal place (i.e. 1,200 should beentered as 1.2). Negative amounts should be indicated by a minus sign. Leave no cell blank, enter "0" wherever applicable.)Situation201632124|$404207644

Solution: Income tax payable = Taxable income * Tax rate Income tax expense = Income tax payable…

Answered: Four independent situations are…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 7C

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Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions. 1. The deferred tax consequences of future deductible amounts and operating loss carryforwards 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year 5. The change during the year in a corporations deferred tax liabilities and assets 6. The deferred tax consequences of future taxable amounts 7. The portion of o deferred tax asset for which it is more likely than not that a tax benefit will not be realized 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively 9. The sum of income tax payable and deferred tax expense (or benefit) 10. The amount of income taxes paid or payable (or refundable) for the current year 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year 13. Income tax expense divided by income before income taxes
Barth James Inc. has the following deferred tax assets and liabilities: 12,000 noncurrent deferred tax asset, and 10,500 noncurrent deferred tax liability. Show how Barth James would report these deferred tax assets and liabilities on its balance sheet.

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