Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 18, Problem 1P
Definitions The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions.
- 1. The
deferred tax consequences of future deductible amounts and operating loss carryforwards - 2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or settled, respectively
- 3. Temporary difference that results in taxable amounts in future years when the related asset or liability is recovered or settled, respectively
- 4. The future effects on income taxes, as measured by the applicable enacted tax rate and provisions of the enacted tax low, resulting from temporary differences and operating loss carryforwards at the end of the current year
- 5. The change during the year in a corporation’s
deferred tax liabilities and assets - 6. The deferred tax consequences of future taxable amounts
- 7. The portion of o
deferred tax asset for which it is more likely than not that a tax benefit will not be realized - 8. Temporary difference that results in deductible amounts in future years when the related asset or liability is recovered or settled, respectively
- 9. The sum of income tax payable and deferred tax expense (or benefit)
- 10. The amount of income taxes paid or payable (or refundable) for the current year
- 11. An excess of tax deductible expenses over taxable revenues in a year that may be carried forward to reduce taxable income in a future year
- 12. The excess of taxable revenues over tax deductible expenses and exemptions for the year
- 13. Income tax expense divided by income before income taxes
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Definitions
The FASB has defined several terms in regard to accounting for income taxes. Below are various code letters (for terms) followed by definitions.
Code Letter
Term
Code Letter
Term
A.
Future deductible amount
H
Deferred tax consequences
B
Income tax payable (or refund)
I
Future taxable amount
Operating loss carryback
Deferred tax liability
D
Valuation allowance
K
Temporary difference
E
Deferred tax asset
Income tax expense (or benefit)
F
Operating loss carryforward
M
Deferred tax expense (or benefit)
Taxable income
Required:
Indicate which term belongs with each definition by choosing the correct term.
1. The deferred tax consequences of future deductible amounts and operating loss carryforwards
2. A difference between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future years when the reported amount of the asset or liability is recovered or
settled, respectively
X
3. Temporary…
The recognition of current tax under AASB 112/IAS 12 Income Taxes is based on the following.
a. the total income tax expense for the current period.
b. the prima facie tax on accounting profit before tax for the current period.
c. the tax on taxable profit of the current period that is due to the taxation authorities including amounts paid during the period and amounts payable or receivable at the end of the period.
d. the amount of income tax payable to, or receivable from, the taxation authorities at the end of the current period
1. The amount of income taxes that relate to financial income subject to tax is reported on the income
statement as
A. long-term deferred income taxes (credit) C. income tax expense
B. current deferred income taxes (debit)
D. income tax payable
2. An item that would create a permanent difference in pretax financial and taxable income would be
A. using accelerated depreciation for tax purposes & straight line depreciation for book purposes.
B. using the percentage of completion method on long-term construction contracts.
C. purchasing equipment previously leased with an operating lease in prior years.
D. paying fines for violation of laws.
3. Which of the following is the most likely item to result in a deferred tax asset?
A. using completed contract method of recognizing construction revenue tax purposes, but using
percentage of completion method for financial reporting purposes.
B. using accelerated depreciation for tax purposes but straight-line depreciation for accounting
purposes.…
Chapter 18 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 18 - What source is used to determine income tax...Ch. 18 - Prob. 2GICh. 18 - Prob. 3GICh. 18 - Prob. 4GICh. 18 - Prob. 5GICh. 18 - Prob. 6GICh. 18 - What are the three characteristics of a liability,...Ch. 18 - Prob. 8GICh. 18 - When does a corporation establish a valuation...Ch. 18 - List the steps necessary to measure and record a...
Ch. 18 - Prob. 11GICh. 18 - Prob. 12GICh. 18 - Prob. 13GICh. 18 - Prob. 14GICh. 18 - Prob. 15GICh. 18 - Describe an operating loss carryforward. List the...Ch. 18 - Prob. 17GICh. 18 - Prob. 18GICh. 18 - Prob. 19GICh. 18 - Prob. 20GICh. 18 - Prob. 21GICh. 18 - Prob. 22GICh. 18 - Prob. 23GICh. 18 - Which of the following is not a cause of a...Ch. 18 - Which of the following is an argument in favor of...Ch. 18 - Prob. 3MCCh. 18 - Prior to and during 2019, Shadrach Company...Ch. 18 - At the beginning of 2019, Conley Company purchased...Ch. 18 - Oliver Company earned taxable income of 7,500...Ch. 18 - Prob. 7MCCh. 18 - Prob. 8MCCh. 18 - Brooks Company reported a prior period adjustment...Ch. 18 - Which component of current income is not disclosed...Ch. 18 - Parker Company identifies depreciation as the only...Ch. 18 - Refer to RE18-1. Assume that Parkers taxable...Ch. 18 - In the current year, Madison Corporation had...Ch. 18 - Refer to RE18-3. Prepare the additional journal...Ch. 18 - Turnip Company purchased an asset at a cost of...Ch. 18 - Prob. 6RECh. 18 - Compute Radish Companys taxable income given the...Ch. 18 - Sky Company reports a pretax operating loss of...Ch. 18 - Prob. 9RECh. 18 - Kline Company has the following items of pretax...Ch. 18 - Barth James Inc. has the following deferred tax...Ch. 18 - Cole Company had a deferred tax liability of 1,000...Ch. 18 - Future Taxable Amount Arrow Company began...Ch. 18 - Change in Tax Rates At the end of 2019, Sentry...Ch. 18 - Temporary Difference At the end of 2019, its first...Ch. 18 - Single Temporary Difference: Multiple Rates At the...Ch. 18 - Prob. 5ECh. 18 - Valuation Account At the end of 2019, its first...Ch. 18 - Deferred Tax Asset and Valuation Account Zeta...Ch. 18 - Incomc Taxes Then Company has been in operation...Ch. 18 - Prob. 9ECh. 18 - Multiple Temporary Differences Vickers Company...Ch. 18 - Multiple Tax Rates For the year ended December 31,...Ch. 18 - Temporary and Permanent Differences Lin has just...Ch. 18 - Temporary and Permanent Differences Assume the...Ch. 18 - Operating Loss At the end of 2019, Keil Company...Ch. 18 - Operating Loss At the end of 2019, its first year...Ch. 18 - Operating Loss Baxter Company began operations in...Ch. 18 - Intraperiod Tax Allocation Wright Company reports...Ch. 18 - Prob. 18ECh. 18 - Prob. 19ECh. 18 - Balance Sheet Presentation Thiel Company reports...Ch. 18 - Uncertain Tax Position At the end of the current...Ch. 18 - Definitions The FASB has defined several terms in...Ch. 18 - Temporary and Permanent Differences In the current...Ch. 18 - Multiple Temporary Differences Wilcox Company has...Ch. 18 - Interperiod Tax Allocation Klerk Company had four...Ch. 18 - Prob. 5PCh. 18 - Interperiod Tax Allocation Quick Company reports...Ch. 18 - Deferred Tax Liability: Depreciation At the...Ch. 18 - Deferred Tax Liability: Depreciation Gire Company...Ch. 18 - Interperiod Tax Allocation Peterson Company has...Ch. 18 - Operating Loss Ross Company has been in business...Ch. 18 - Prob. 11PCh. 18 - Comprehensive Colt Company reports pretax...Ch. 18 - Prob. 13PCh. 18 - Comprehensive Jayryan Company sells products in a...Ch. 18 - Prob. 1CCh. 18 - Prob. 2CCh. 18 - Prob. 3CCh. 18 - Interperiod and Intraperiod Tax Allocation Income...Ch. 18 - Prob. 5CCh. 18 - Intel-period Tax Allocation Chris Green, CPA, is...Ch. 18 - Prob. 7CCh. 18 - Analyzing Coca-Colas Income Tax Disclosures Obtain...Ch. 18 - Prob. 9C
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