Exam 5: The Statement of Cash Flows

Under the comprehensive allocation method,deferred tax assets and liabilities are valued at the tax rates that are expected to be substantially enacted in the year of reversal.

Prepayments of Deferred income tax expense may be viewed as a deferred tax asset.

A taxable amount is exemplified by:

JMR Corporation sold a truck resulting in a capital gain of $11,000.$5,500 represents a:

The following data of ABC Ltd.relates to the current year: Compute taxable income for the year.

KAR Company sold a building resulting in a capital gain of $15,000.Choose the statement below that best describes what the impact of this is:

What is inter-period tax allocation?

Comprehensive allocation recognizes the amount of taxes assessed in each year as the income tax expense for that year.

Explain the income tax disclosures required under ASPE.

Financial analysts tend to ignore deferred taxes when computing the effective tax rate.

Which of the following is an example of a temporary difference which would not result in a deferred tax asset?

What term is used to describe an amount that will eventually be tax deductible?

What term is used to describe an amount that will eventually be taxable?

KG Company had capital assets with a carrying value of $1,560,000 and a tax value of $1,670,000.In addition they had an accrued warranty liability of $80,000 of which $20,000 had actually been incurred and golf club dues in the amount of $3,000.Calculate the temporary difference deductible (taxable).

The following information is available for Ryan Corporation: Assets at cost-$260,000 (8 year life,straight-line depreciation,no salvage value,purchased 2 years ago); Accumulated depreciation-$65,000.Accumulated CCA-$105,300; CCA rate-30%; meals and entertainment recorded in the books-$12,000; golf dues paid and expensed on the books-$5,000; pre-tax accounting income-$40,000.No CCA was taken during the current year.From the information provided above,what is the total amount of expenses that will never have an effect on taxable income (and thus never trigger any DTA/DTL amounts)?

The following information is available to you: Income before tax; $80,000; depreciation,$15,000; CCA,$13,500; tax rate,44%.Calculate the Deferred income tax asset (liability).

Temporary differences relate only to items that will be recognized on both the income statement and the tax return,but in different reporting periods.

During the originating period of a temporary difference,pre-tax accounting income is defined as taxable income plus taxable amounts minus deductible amounts.

Under the deferral approach,deferred taxes on the balance sheet are valued at the tax rate in that will be in effect when the temporary differences reverse.

RG Corporation has a temporary difference of $40,000 in 2014.Its tax rate in 2014 is 40% and the government enacted tax rate known at the end of 2014 for 2000 and subsequent years is 45%.What tax rate should be used to calculate the deferred income tax asset or liability?