Problem - Presented below are two independent situations related to future taxable and deductible amounts resulting from temporary differences existing at December 31, 2012.
Mooney Co. has developed the following schedule of future taxable and deductible amounts.
|
2013
|
2014
|
2015
|
2016
|
2017
|
|
Taxable amounts
|
$300
|
$300
|
$300
|
$300
|
$300
|
|
Deductible amount
|
-
|
-
|
-
|
(2,100)
|
|
Roesch Co. has the following schedule of future taxable and deductible amounts.
|
2013
|
2014
|
2015
|
2016
|
|
Taxable amounts
|
$300
|
$300
|
$300
|
$300
|
|
Deductible amount
|
-
|
-
|
(3,100)
|
-
|
Both Mooney Co. and Roesch Co. have taxable income of $5,700 in 2012 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2012 are 34% for 2012-2015 and 36% for years thereafter. All of the underlying temporary differences relate to noncurrent assets and liabilities.
1. Compute the net amount of deferred income taxes to be reported at the end of 2012, and indicate how it should be classified on the balance sheet for situation one.
2. Compute the net amount of deferred income taxes to be reported at the end of 2012, and indicate how it should be classified on the balance sheet for situtation two.