Calculate income tax amounts under various circumstances
Response to the following problem:
Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:
|
($ in thousand) Situation |
|
1 |
2 |
3 |
4 |
|
Taxable income
|
$85
|
$215
|
$195
|
$260
|
|
Future deductible amounts
|
15
|
|
20
|
20
|
|
Future taxable amounts
|
|
15
|
15
|
30
|
|
Balance(s) at beginning of the year:
|
|
|
|
|
|
Deferred Tax asset
|
2
|
|
9
|
4
|
|
Deferred tax liability
|
|
2
|
2
|
|
The enacted tax rate is 40%.
Required:
For each situation, determine the:
a. Income tax payable currently.
b. Deferred tax asset-balance.
c. Deferred tax asset-change (dr) cr.
d. Deferred tax liability-balance.
e. Deferred tax liability-change (dr) cr.
f. Income tax expense.