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Problem 16-2 (Algo) Temporary difference; determine deferred tax amount for three years; financial statement effects [LO16-3] Times-Roman Publishing Company reports the following amounts in its first three years of operation: The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year recelved, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the futuri Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, Indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax llability? Complete this question by entering your answers in the tabs below. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5). Problem 16-2 (Algo) Temporary difference; determine deferred tax amount for three years; financial statement effects [LO16-3] Times-Roman Publishing Company reports the following amounts in its first three years of operation: The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year recelved, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the futuri Required: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, Indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax llability? Complete this question by entering your answers in the tabs below. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? Note: Enter all amounts as positive values. Enter your answers in thousands (i.e., 5,000 should be entered as 5)

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