Income Taxes
Response to the following problem:
Thun Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2010, its deferred tax asset was $690 and its deferred tax liability was $750. The company expects its future deductible amount to be "deductible" in 2011 and its future taxable amount to be "taxable" in 2012. In 2009, Congress enacted income tax rates for future years as follows: 2010, 30%; 2011, 34%; and 2012, 35%.
At the end of 2010, the company reported income taxes payable of $12,600, an increase in its deferred tax liability of $300, and an ending balance in its deferred tax asset of $860. The company has prepared the following schedule of items related to its income taxes for 2010.
Item Amount
Taxable income for 2010 ......
Future taxable amount, 12/31/10 ......
Increase in future deductible amount during 2010 ......
Income tax expense for 2010 ......
Required
Fill in the blanks in the preceding schedule. Show your calculations.