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##### E19-7B (Terminology, Relationships, Computations, Entries) Instructions Complete the following statements by filling in the blanks. (a) If a \$150,000 balance in Deferred Tax Liability was computed by use of a 30% rate, the underlying cumulative temporary

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E19-7B (Terminology, Relationships, Computations, Entries);Instructions;Complete the following statements by filling in the blanks.;(a) If a \$150,000 balance in Deferred Tax Liability was computed by use of a 30% rate, the underlying cumulative temporary difference amounts to \$_______.;(b) An income statement that reports current tax benefit of \$63,000 and deferred tax expense of \$19,000 will report total income tax ________ of \$________.;(c) If a taxable permanent difference originates in 2012, it will cause taxable income for 2012 to be ________ (less than, greater than) pretax financial income for 2012.;(d) If the income statement shows total income tax expense of \$186,000 and deferred tax expenses of \$45,000, the total taxes due on the tax return for the period are _______.;(e) If total tax expense is \$225,000 and the current expense is \$155,000, then the deferred tax _______ (expense, benefit) is \$_______.;(f) In a period in which a deductible temporary difference reverses, the reversal will cause taxable income to be _______ (less than, greater than) pretax financial income.;(g) An decrease in the Deferred Tax Assets account on the balance sheet is recorded by a _______ (debit, credit) to the Income Tax Expense account.;(h) If a corporation?s ?Income tax payable? on the balance sheet totals \$100,000, the company made estimated payments during the year totaling \$40,000, and the tax rate is 40%, taxable income equals \$________.;(i) A valuation account _______ the balance reported in the balance sheet for a deferred tax asset to the amount expected to be realized.;(j) Deferred taxes ________ (are, are not) recorded to account for temporary differences.

Paper#75330 | Written in 18-Jul-2015

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