1). An income statement that reports current tax benefit of $63,000, and deferre
ID: 2419384 • Letter: 1
Question
1). An income statement that reports current tax benefit of $63,000, and deferred tax expense of $19,000 will report total income tax _____________ of $________.
2). If a taxable permanent difference originates in 2012, it will cause taxable income for 2012 to be _________(less than, greater than) pretax financial income for 2012.
3. If the income statement shows total income tax expenses of $186,000 and deferred tax expenses of $45,000, the total taxes due on the tax return for the period are ______________.
4. In a period in which a deductible temporary difference reverses, the reversal will cause taxable income to be __________ (less than, greater than) pretax financial income.
5. If a corporation’s “Income tax payable” on the balance sheet totals $100,000, the company made estimated payments during the year totaling $40,000, and the tax rate is 40%, taxable income equals $ ________.
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Explanation / Answer
1 An income statement that reports current tax benefit of $63,000, and deferred tax expense of $19,000 will report total income tax Asset of $ 44,000
2 If a taxable permanent difference originates in 2012, it will cause taxable income for 2012 to be greater than pretax financial income for 2012.
3 If the income statement shows total income tax expenses of $186,000 and deferred tax expenses of $45,000, the total taxes due on the tax return for the period are $231,000.
4 In a period in which a deductible temporary difference reverses, the reversal will cause taxable income to be less than pretax financial income.
5 If a corporation’s “Income tax payable” on the balance sheet totals $100,000, the company made estimated payments during the year totaling $40,000, and the tax rate is 40%, taxable income equals $ 250,000.
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