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  3. two independent situations are described below. ea

Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts...

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Accounting

Two independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:

SITUATION 1 2
Taxable income $ 33,000 $ 73,000
Amounts at year-end:
Future deductible amounts 4,300 11,700
Future taxable amounts 0 4,300
Balances at beginning of year, dr (cr):
Deferred tax asset $ 1,000 $ 4,095
Deferred tax liability 0 1,000

The enacted tax rate is 35% for both situations. Required: For each situation determine the:
SITUATION
1 2
(a.) Income tax payable currently.
(b.) Deferred tax asset - balance at year-end.
(c.) Deferred tax asset change dr or (cr) for the year.
(d.) Deferred tax liability - balance at year-end.
(e.) Deferred tax liability change dr or (cr) for the year.
(f.) Income tax expense for the year.

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