Scott Ward - Wk4 - $54,000 Current tax expense for 2007...

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EXERCISE 19-1 (15-20 minutes) (a) Pretax financial income for 2007 $300,000 Temporary difference resulting in future taxable amounts in 2008 ($55,000) in 2009 ($60,000) in 2010 ($65,000) Taxable income for 2007 $120,000 Taxable income for 2007 $120,000 Enacted tax rate 30% Income tax payable for 2007 $36,000 (b) Future Years 2008 2009 2010 Total Future taxable (deductible) amounts $55,000 $60,000 $65,000 $180,000 Tax rate 30% 30% 30% Deferred tax liability (asset) $16,500 $18,000 $19,500 $54,000 Deferred tax liability at the end of 2007 $54,000 Deferred tax liability at the beginning of 2007 $0 Deferred tax expense for 2007 (increase in deferred tax liability)
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Unformatted text preview: $54,000 Current tax expense for 2007 (Income tax payable) $36,000 Income tax expense for 2007 $90,000 Income Tax Expense $90,000 Income Tax Payable $36,000 Deferred Tax Liability $54,000 (c) Income before income taxes $300,000 Income tax expense Current $36,000 Deferred $54,000 $90,000 Net income $210,000 Note: The current/deferred tax expense detail can be presented in the notes to the financial statements. EXERCISE 19-7 (10-15 minutes) (a) greater than (b) $190,000 (c) are not (d) less than (e) benefit, $15,000 (f) $3,500 (g) debit (h) $59,000 (i) possible, will not be (j) benefit...
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Scott Ward - Wk4 - $54,000 Current tax expense for 2007...

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