"3-8-2010 - EXERCISE 19-8 (a) 2010 Income Tax

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Unformatted text preview: EXERCISE 19-8 (a) 2010 Income Tax Expense................................................................ 336,000 Deferred Tax Asset ($20,000 x 40%)....................................... 8,000 Deferred Tax Liability ($30,000 x 40%)........................... 12,000 Income Tax Payable ($830,000 x 40%)............................ 332,000 2011 Income Tax Expense................................................................ 364,000 Deferred Tax Asset ($10,000 x 40%)....................................... 4,000 Deferred Tax Liability ($40,000 x 40%)........................... 16,000 Income Tax Payable ($880,000 x 40%)............................ 352,000 2012 Income Tax Expense............................................................... 378,000 Deferred Tax Asset ($8,000 x 40%)........................................ 3,200 Deferred Tax Liability ($20,000 x 40%)........................... 8,000 Income Tax Payable ($933,000 x 40%)............................ 373,200 (b) Current assets Deferred tax asset ($8,000 + $4,000 + $3,200).............................................. $15,200 Long-term liabilities Deferred tax liability ($12,000 + $16,000 + $8,000)..................................... $36,000 The warranty is classified as current because the related liability is current. The deferred tax liability is noncurrent because the related asset is noncurrent. (c) Pretax financial income................................................................... $945,000 Income tax expense Current....................................................................................... $373,200 Deferred ($8,000 $3,200)....................................................... 4,800 378,000 Net Income...................................................................................... $567,000 1 Note : The details on the current/deferred tax expense can be disclosed in the notes to the financial statements. 2 EXERCISE 19-9 2008 Income Tax Expense....................................................................................... 36,000 Income Tax Payable ($90,000 x 40%).................................................. 36,000 2009 Income Tax Refund Receivable ($160,000 x 45%)........................................................................................ 72,000 Benefit Due to Loss Carryback (Income Tax Expense)..........................................................................
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This note was uploaded on 04/09/2011 for the course MGMT 351 taught by Professor Staff during the Winter '08 term at Purdue University-West Lafayette.

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"3-8-2010 - EXERCISE 19-8 (a) 2010 Income Tax

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