WEekly Discussion 3

Intermediate Accounting

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Unformatted text preview: Current tax represents Homestake Mining company's taxes payable for the year of $26,349.00. The Deferred taxes referse to the tax benefit thats received. b) Homestake must disclose the gross deferred tax liabiliities and the gross deferred tax assets because they may affect the pre-tax financial income. The gross deferred tax liabilities increase taxable income in future periods while the gross deferred tax assets decrease the taxable income in future periods. These are attributed to temproary differences in which assets are recovered in future periods or liabilities are settled in future periods. c) The carryback and carryforward will indirectly affect the reporting of deferred tax assets and deferred tax liabilities. This is because the balances on those accounts are affected by the approriate tax rate in which the carryback and carryforward may affect the enacted tax rate. THe first step to finding tax rates is to determine the future taxable and future deductible amounts to be affected by temporary differences. For instance if there is a future taxable amount scheduled for 2012 and net operating loss is also expepepepcted which may result in the use of different enacted rates. The use of either the NOL carried back from the prior year's enacted rate or the enacted rate of the future year for the carry forward. These rates could be different which would affect the deferred tax liability....
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This document was uploaded on 09/18/2011.

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