taxes

Question 1

tax accrual entry

Answer 1

income tax expense (plug)
dta
dtl
inc tax payable (income tax amount)

Question 2

use future ____to calculate dta and dtl

Answer 2

tax rates

Question 3

pretax acc income

Answer 3

+- originating temp difference
+- permanent differences for period
=taxable income

Question 4

future taxable income>future pretax income

Answer 4

Def tax lia

Deferred Tax Liability – The recognized tax effect of future taxable temporary differences. These differences, caused by transactions that have occurred as of the balance sheet date, will cause future taxable income to increase relative to pretax accounting income.

Question 5

future taxable income

Answer 5

Def tax asset

Deferred Tax Asset – The recognized tax effect of future deductible temporary differences. These differences, caused by transactions that have occurred as of the balance sheet date, will cause future taxable income to decrease relative to pretax accounting income.

Question 6

permanent differences

Answer 6

Tax-free interest income – An example of this difference is the interest income earned on an investment in a state or municipal bond. The interest income is included in pretax accounting income, but not in taxable income.
B.
Life insurance expense – The insurance premiums on a life insurance policy for a key employee where the firm is the beneficiary are not deductible from taxable income, but are an expense for financial reporting.
C.
Proceeds on life insurance – In the event of the death of the key employee, the proceeds from the insurance policy are not taxable, but are included as a gain for financial reporting purposes.
D.
Dividends received deduction – The dividends received deduction is a deduction for tax purposes equal to 80% (amount subject to change) of qualified dividends received. It is an amount of dividends received that is not subject to tax. However, the entire amount of dividends received is included in pretax accounting income. There is no similar deduction for financial reporting purposes.
E.
Fines and penalties – Many fines, penalties and expenses resulting from a violation of law are not deductible for tax purposes, but are recognized as an expense or loss for financial reporting purposes.
F.
Depletion – GAAP depletion (cost depletion) is based on the cost of a natural resource used up. Tax depletion is based on revenues of resource sold. The difference in any year is a permanent difference.

Question 7

Current income tax expense is the _____ for the year.

its very confusing

Answer 7

income tax liability

Question 8

is using the net method you

Answer 8

can’t net current and concurrent. only current assets with current lia etc