1. Problem - In its first year of operations, a company had Income (per books before income taxes) of a certain amount and Taxable income of a certain amount. The disparity between book income and taxable income is attributable to a temporary difference which will reverse. Assuming the enacted tax rates in effect, what should the company record as a net deferred tax asset or liability for the year?
2. Problem - In its first year of operations, a company had Income (per books before income taxes) of a certain amount. The following items are included in the pre-tax income: interest income from municipal bonds; accrued warranty costs; installment sales revenue; and prepaid rent expense. Assuming the enacted tax rate is in effect, what amount should the company record as a net current deferred tax asset or liability for the year?
3. Problem - A company reported a deferred tax liability of a certain amount which was attributable to a taxable temporary difference of a certain amount. The temporary difference is scheduled to reverse. During the year, a new tax law increased the corporate tax rate. Edwards should record this change by debiting what account and for what amount?
4. Problem - Operating income/(loss) and tax rates for a company are given. Assuming that the company opts to carry-back its NOL, what is the amount of income tax payable?