Question

A. If a $150,000 balance in Deferred Tax Liability was computedby use of a 30% rate, the underlying cumulative temporarydifference amounts to $__________.

B. An income statement that reports current tax benefit of$63,000, and deferred tax expense of $19,000 will report totalincome tax _____________ of$________.

C. If a taxable permanent difference originates in 2012, it willcause taxable income for 2012 tobe _________(less than, greater than) pretax financial income for2012.

D. If the income statement shows total income tax expenses of$186,000 and deferred tax expenses of $45,000, the total taxes dueon the tax return for the period are______________.

E. If total tax expense is $225,000 andthe current expense is $155,000, then the deferred tax_____________ (expense, benefit) is $__________.

F. In a period in which a deductible temporary differencereverses, the reversal will cause taxable income to be __________(less than, greater than) pretax financialincome.

G. A decrease in the Deferred Tax Assets account onthe balance sheet is recorded by a _________ (debit,credit) to the Income Tax Expenseaccount.

H. If a corporation’s “Income tax payable” on the balance sheettotals $100,000, the company made estimated payments during theyear totaling $40,000, and the tax rate is 40%, taxable incomeequals $________.

I. A valuation account___________ (reduces, increases) the balance reported in thebalance sheet for a deferred tax asset to the amount expected to berealized.

J. Deferred taxes _________ (are,are not) recorded to account for temporary differences.