Question 1

State whether or not discounting of deferred assets and liabilities is required or permitted and explain why or why not.

Accepted Answer

IAS 12 states the following: "Deferred t

Question 2

How much tax would be reported under the taxes payable method for FY2017?

Accepted Answer

A) 23,750 
B) 25,500 
C) 27,500 
D) 36,000 
A) 23,750 
B) 25,500 
C) 27,500 
D) 36,000

Question 3

What is a deferred tax asset?

Accepted Answer

A) A deductible temporary difference that results in future taxable income being less than accounting income. 
B) The amount of income tax recoverable in future periods as a result of deductible temporary differences,losses carried forward,or tax credits carried forward. 
C) A deductible temporary difference that results in future taxable income being higher than accounting income. 
D) The amount of income tax payable in future periods as a result of taxable temporary differences. 
A) A deductible temporary difference that results in future taxable income being less than accounting income. 
B) The amount of income tax recoverable in future periods as a result of deductible temporary differences,losses carried forward,or tax credits carried forward. 
C) A deductible temporary difference that results in future taxable income being higher than accounting income. 
D) The amount of income tax payable in future periods as a result of taxable temporary differences.

Question 4

Which statement is not correct?

Accepted Answer

A) The accrual method focuses on the balance sheet. 
B) The deferral method focuses on the income statement. 
C) The deferral method matches tax expense to the balance sheet. 
D) The accrual and deferral methods are both tax allocation methods. 
A) The accrual method focuses on the balance sheet. 
B) The deferral method focuses on the income statement. 
C) The deferral method matches tax expense to the balance sheet. 
D) The accrual and deferral methods are both tax allocation methods.

Question 5

Which method does not use "temporary differences" to account for income tax expense?

Accepted Answer

A) The taxes payable method. 
B) The deferral method. 
C) The accrual method. 
D) The tax allocation method. 
A) The taxes payable method. 
B) The deferral method. 
C) The accrual method. 
D) The tax allocation method.

Question 6

What adjustment is required to the opening deferred taxes as a result of the rate change?

Accepted Answer

A) 30,000 credit 
B) 90,000 credit 
C) 40,000 credit 
D) 40,000 debit 
A) 30,000 credit 
B) 90,000 credit 
C) 40,000 credit 
D) 40,000 debit

Question 7

What is the income tax payable under the deferral method for FY2016?

Accepted Answer

A) $25,500 
B) $30,000 
C) $30,750 
D) $36,000 
A) $25,500 
B) $30,000 
C) $30,750 
D) $36,000

Question 8

A company has a deferred tax liability of $120,000 at the beginning of the fiscal year relating to a taxable temporary difference of $300,000.The current year tax rate is 50%.
Required:
Provide the journal entry to reflect the tax rate change.

Accepted Answer

The tax rate associated with t

Question 9

A company had taxable income of $2 million in fiscal 2016 and paid taxes of 0.4 million;the company incurred a loss of $0.5 million in fiscal 2018 when the tax rate is 30%.How much refund is the company entitled to?

Accepted Answer

A) $0.2 million 
B) $0.1 million 
C) $0.4 million 
D) $0.6 million 
A) $0.2 million 
B) $0.1 million 
C) $0.4 million 
D) $0.6 million

Question 10

What is the tax expense under the deferral method for FY2016?

Accepted Answer

A) $25,500 
B) $30,000 
C) $30,750 
D) $36,000 
A) $25,500 
B) $30,000 
C) $30,750 
D) $36,000

Question 11

Which statement is correct?

Accepted Answer

A) The deferral and accrual methods produce the same tax expense when tax rates are constant. 
B) The deferral method applies new tax rates to accumulated tax balances. 
C) The accrual method applies new tax rates to only to current year's income. 
D) The deferral and accrual methods produce the same tax expense when tax rates are falling. 
A) The deferral and accrual methods produce the same tax expense when tax rates are constant. 
B) The deferral method applies new tax rates to accumulated tax balances. 
C) The accrual method applies new tax rates to only to current year's income. 
D) The deferral and accrual methods produce the same tax expense when tax rates are falling.

Question 12

Under the accrual method,what is the current year temporary difference in FY2017?

Accepted Answer

A) 5,000 
B) 27,500 
C) 45,000 
D) 37,500 
A) 5,000 
B) 27,500 
C) 45,000 
D) 37,500

Question 13

What is the accepted method of accounting for taxes under IFRS and ASPE? Accrual method or taxes payable method?

Accepted Answer

Currently,the accrual method i

Question 14

Under the accrual method,what is the effect of the tax rate change in FY2019?

Accepted Answer

A) Increase of 5,000. 
B) Decrease of 5,000. 
C) Increase of 30,000. 
D) Decrease of 30,000. 
A) Increase of 5,000. 
B) Decrease of 5,000. 
C) Increase of 30,000. 
D) Decrease of 30,000.

Question 15

What is the deferred tax liability under the deferral method for FY2018?

Accepted Answer

A) $52,500 
B) $36,750 
C) $27,500 
D) $15,750 
A) $52,500 
B) $36,750 
C) $27,500 
D) $15,750

Question 16

The following summarizes information relating to Gonzalez Corporation's operations for the current year.
   
Required:
Compute the amount of taxes payable and income tax expense for Gonzalez Corporation.

Accepted Answer

The answer of The following summarizes information relating to Gonzalez...

Question 17

What is the ending balance of the current year deferred tax liability?

Accepted Answer

A) 30,000 debit 
B) 30,000 credit 
C) 150,000 credit 
D) 190,000 credit 
A) 30,000 debit 
B) 30,000 credit 
C) 150,000 credit 
D) 190,000 credit

Question 18

Why does Capital Cost Allowance (CCA)usually exceed the amount of depreciation for tax purposes?

Accepted Answer

Capital cost allowance (CCA)usually exce

Question 19

Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template:

Accepted Answer

The answer of Summarize the rules covering presentation and disclosure...

Question 20

In the first two years of operations,a company reports taxable income of $125,000 and $65,000,respectively.In the first two years,the company paid $50,000 and $13,000.It is now the end of the third year,and the company has a loss of $160,000 for tax purposes.The company carries losses to the earliest year possible.The tax rate is currently 25%.
Required:
Compute the amount of income tax payable or receivable in the current (third)year.

Accepted Answer

The loss of $160,000 can be carried back

State whether or not discounting of deferred assets and liabilities is required or permitted and explain why or why not.

How much tax would be reported under the taxes payable method for FY2017?

What is a deferred tax asset?

Which statement is not correct?

Which method does not use "temporary differences" to account for income tax expense?

What adjustment is required to the opening deferred taxes as a result of the rate change?

What is the income tax payable under the deferral method for FY2016?

A company has a deferred tax liability of $120,000 at the beginning of the fiscal year relating to a taxable temporary difference of $300,000.The current year tax rate is 50%. Required: Provide the journal entry to reflect the tax rate change.

A company had taxable income of $2 million in fiscal 2016 and paid taxes of 0.4 million;the company incurred a loss of $0.5 million in fiscal 2018 when the tax rate is 30%.How much refund is the company entitled to?

What is the tax expense under the deferral method for FY2016?

Which statement is correct?

Under the accrual method,what is the current year temporary difference in FY2017?

What is the accepted method of accounting for taxes under IFRS and ASPE? Accrual method or taxes payable method?

Under the accrual method,what is the effect of the tax rate change in FY2019?

What is the deferred tax liability under the deferral method for FY2018?

The following summarizes information relating to Gonzalez Corporation's operations for the current year. Required: Compute the amount of taxes payable and income tax expense for Gonzalez Corporation.

What is the ending balance of the current year deferred tax liability?

Why does Capital Cost Allowance (CCA)usually exceed the amount of depreciation for tax purposes?

Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template:

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters

Exam 16: Accounting for Income Taxes

State whether or not discounting of deferred assets and liabilities is required or permitted and explain why or why not.

How much tax would be reported under the taxes payable method for FY2017?

What is a deferred tax asset?

Which statement is not correct?

Which method does not use "temporary differences" to account for income tax expense?

What adjustment is required to the opening deferred taxes as a result of the rate change?

What is the income tax payable under the deferral method for FY2016?

A company has a deferred tax liability of $120,000 at the beginning of the fiscal year relating to a taxable temporary difference of $300,000.The current year tax rate is 50%. Required: Provide the journal entry to reflect the tax rate change.

A company had taxable income of $2 million in fiscal 2016 and paid taxes of 0.4 million;the company incurred a loss of $0.5 million in fiscal 2018 when the tax rate is 30%.How much refund is the company entitled to?

What is the tax expense under the deferral method for FY2016?

Which statement is correct?

Under the accrual method,what is the current year temporary difference in FY2017?

What is the accepted method of accounting for taxes under IFRS and ASPE? Accrual method or taxes payable method?

Under the accrual method,what is the effect of the tax rate change in FY2019?

What is the deferred tax liability under the deferral method for FY2018?

The following summarizes information relating to Gonzalez Corporation's operations for the current year. Required: Compute the amount of taxes payable and income tax expense for Gonzalez Corporation.

What is the ending balance of the current year deferred tax liability?

Why does Capital Cost Allowance (CCA)usually exceed the amount of depreciation for tax purposes?

Summarize the rules covering presentation and disclosure of the following items according to IFRS using the following template:

Current Liabilities and Contingencies

Non-Current Financial Liabilities

Equities

Complex Financial Instruments

Earnings Per Share

Pensions and Other Employee Future Benefits

Accounting for Leases

Statement of Cash Flows

Accounting Changes

Filters