Two independent situations are described below

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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 $42,000 $82,000

Amounts at year-end:    

Future deductible amounts 5,200  10,200

Future taxable amounts  0  5,200

Balances at beginning of year, dr (cr):    

Deferred tax asset $1,000 $3,570

Deferred tax liability  0  1,000

    

The enacted tax rate is 35% for both situations.

 

 

For each situation, 1 & 2, determine the:

(a) Income Tax payable currently

(b) Deferred Tax Asset-Balance at year end

(c) Deferred Tax 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