E19-7 - of 40 how much will appear on the December 31 Year...

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E19-7 (LO 2 , 3 , 4 , 6 ) (Terminology, Relationships, Computations, Entries) Instructions Complete the following statements by filling in the blanks. 1. In a period in which a taxable temporary difference reverses, the reversal will cause taxable income to be _____ (less than, greater than ) pretax financial income. 2. If a $76,000 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $ 190,000 . 3. Deferred taxes _____ (are, are not ) recorded to account for permanent differences. 4. If a taxable temporary difference originates in 2007, it will cause taxable income for 2007 to be _____ ( less than , greater than) pretax financial income for 2007. 5. If total tax expense is $50,000 and deferred tax expense is $65,000, then the current portion of the expense computation is referred to as current tax _____ (expense, benefit ) of $15,000 . 6. If a corporation's tax return shows taxable income of $100,000 for Year 2 and a tax rate
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Unformatted text preview: of 40%, how much will appear on the December 31, Year 2, balance sheet for “Income tax payable” if the company has made estimated tax payments of $36,500 for Year 2? $3,500 . 7. An increase in the Deferred Tax Liability account on the balance sheet is recorded by a _____ ( debit , credit) to the Income Tax Expense account. 8. An income statement that reports current tax expense of $82,000 and deferred tax benefit of $23,000 will report total income tax expense of $59,000 . 9. A valuation account is needed whenever it is judged to be more likely than not that a portion of a deferred tax asset _____ (will be, will not be ) realized. 10. If the tax return shows total taxes due for the period of $75,000 but the income statement shows total income tax expense of $55,000, the difference of $20,000 is referred to as deferred tax _____ (expense, benefit )....
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