Lesson 19 accounting For income Taxes - Deferred taxes

Question 1

When dealing with deferred taxes what must be disclosed in the company’s financial statement ?

Answer 1

Types &Amounts of existing temporary differences

The nature & amounts of each type of operating loss & tax credit carry forward

Question 2

Expenses recognized in financial income this year and deductible next year is an example of ?

Answer 2

Deferred tax asset

Question 3

Both items are permanent differences and have no deferred tax effect

Answer 3

• Premium on officers life insurance

- Interest received on municipal bonds

Question 4

Permanent differences do not need to be disclosed in

Answer 4

Company’s financial statements

Question 5

How to figure the deferred tax asset when a company switches from DD to straight line

Answer 5

1. Figure the CV of the asset using both methods
2. The difference x tax rate is deferred portion
3. Take CV of DD and /by remaining years=new CV of DD
4. Take one more year depreciation SL- New CV of DD
5. multiply x tax rate = deferred tax portion
6. Compare 2 and 5