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    Historically

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    Allen Kate
    The document discusses deferred tax liabilities and temporary differences between financial accounting income and taxable income. Specifically, it provides 30 multiple choice questions about deferred tax liabilities, deferred tax assets, income tax expense, and accounting for income taxes. The questions cover topics such as the meaning of the term "crystallize" in relation to deferred tax liabilities, reporting deferred taxes on the statement of cash flows, calculating tax benefits from tax loss carrybacks, computing pretax accounting income given tax depreciation methods, determining deferred tax liabilities for future periods, and reconciling book and tax depreciation amounts.

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    Historically

    Uploaded by

    Allen Kate
    44 views2 pages
    The document discusses deferred tax liabilities and temporary differences between financial accounting income and taxable income. Specifically, it provides 30 multiple choice questions about deferred tax liabilities, deferred tax assets, income tax expense, and accounting for income taxes. The questions cover topics such as the meaning of the term "crystallize" in relation to deferred tax liabilities, reporting deferred taxes on the statement of cash flows, calculating tax benefits from tax loss carrybacks, computing pretax accounting income given tax depreciation methods, determining deferred tax liabilities for future periods, and reconciling book and tax depreciation amounts.

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    History

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    The document discusses deferred tax liabilities and temporary differences between financial accounting income and taxable income. Specifically, it provides 30 multiple choice questions about deferred tax liabilities, deferred tax assets, income tax expense, and accounting for income taxes. The questions cover topics such as the meaning of the term "crystallize" in relation to deferred tax liabilities, reporting deferred taxes on the statement of cash flows, calculating tax benefits from tax loss carrybacks, computing pretax accounting income given tax depreciation methods, determining deferred tax liabilities for future periods, and reconciling book and tax depreciation amounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    44 views2 pages

    Historically

    Uploaded by

    Allen Kate
    The document discusses deferred tax liabilities and temporary differences between financial accounting income and taxable income. Specifically, it provides 30 multiple choice questions about deferred tax liabilities, deferred tax assets, income tax expense, and accounting for income taxes. The questions cover topics such as the meaning of the term "crystallize" in relation to deferred tax liabilities, reporting deferred taxes on the statement of cash flows, calculating tax benefits from tax loss carrybacks, computing pretax accounting income given tax depreciation methods, determining deferred tax liabilities for future periods, and reconciling book and tax depreciation amounts.

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    of 2

    Historically, the United Kingdom has recognized only those deferred tax liabilities expected to "crystallize.

    " The
    term "crystallize" is most nearly synonymous with the term
    a. amortized.
    b. realized.
    c. recognized.
    d. liquidated.
    ANS: B PTS: 1 DIF: Easy OBJ: LO 7
    TOP: AICPA FN-Measurement MSC: AACSB Reflective Thinking

    26. On the statement of cash flows using the indirect method, an increase in the deferred tax liability would
    be shown as
    a. an addition to net income.
    b. a deduction from net income.
    c. an increase in investing activities.
    d. an increase in financing activities.
    ANS: A PTS: 1 DIF: Easy OBJ: LO 6
    TOP: AICPA FN-Reporting MSC: AACSB Reflective Thinking

    27. The Morris Corporation reported a $59,000 operating loss in 2014. In the preceding three years, Morris
    reported the following income before taxes and paid the indicated income taxes:

    Year Income Taxes Tax Rate


    2011 $36,000 $10,800 30%
    2012 24,000 8,400 35%
    2013 48,000 16,800 35%

    The amount of tax benefit to be reported in 2014 arising from the tax carryback provisions of the current
    tax code would be
    a. $20,650
    b. $22,500.
    c. $21,300.
    d. $20,100
    ANS: A PTS: 1 DIF: Medium OBJ: LO 3
    TOP: AICPA FN-Measurement MSC: AACSB Analytic

    28. The Racing Company had taxable income of $12,000 during 2014. Racing used accelerated depreciation
    for tax purposes ($3,400) and straight-line depreciation for accounting purposes ($2,000). Assuming
    Racing had no other temporary differences, what would the company's pretax accounting income be for
    2014?
    a. $1,400
    b. $6,600
    c. $13,400
    d. $17,400
    ANS: C PTS: 1 DIF: Medium OBJ: LO 2
    TOP: AICPA FN-Measurement MSC: AACSB Analytic

    29. The following information is taken from Glenville Corporation's 2014 financial records:

    Pretax accounting income ........................... $1,500,000 


    Excess tax depreciation ............................    (45,000)
    Taxable income ..................................... $1,455,000 

    Assume the taxable temporary difference was created entirely in 2014 and will reverse in equal net
    taxable amounts in each of the next three years. If tax rates are 40 percent in 2014, 35 percent in 2015, 35
    percent in 2016, and 30 percent in 2017, then the total deferred tax liability Glenville should report on its
    December 31, 2014, balance sheet is
    a. $13,500.
    b. $15,000.
    c. $15,750.
    d. $18,000.
    ANS: B PTS: 1 DIF: Medium OBJ: LO 4
    TOP: AICPA FN-Measurement MSC: AACSB Analytic

    30. The following information was taken from Caribbean Corporation's 2014 income statement:

    Income before income taxes ............... $1,500,000


    Income tax expense:
      Current ................................ $564,000
      Deferred ............................... 36,000 600,000
    Net income ............................... $ 900,000

    Caribbeans' first year of operations was 2014. The company has a 30 percent tax rate. Management
    decided to use accelerated depreciation for tax purpose and the straight-line method of depreciation for
    financial reporting purposes. The amount charged to depreciation expense in 2014 was $600,000.
    Assuming no other differences existed between book income and taxable income, what amount did
    Caribbean deduct for depreciation on its tax return for 2014?
    a. $480,000
    b. $570,000
    c. $600,000
    d. $720,000
    ANS: D PTS: 1 DIF: Medium OBJ: LO 2
    TOP: AICPA FN-Measurement MSC: AACSB Analytic

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