Q3. Total income tax expense for Year 1 is:

A)   $23,000.

B)   $17,000.

C)   $24,000.

Q4. Laser Tech has net temporary differences between tax and book income resulting in a deferred tax liability of $30.6 million. According to U.S. GAAP, an increase in the tax rate would have what impact on deferred taxes and net income, respectively:

          Deferred Taxes                Net Income

A)    Increase                              No effect

B)    Increase                              Decrease

C)    No effect                             Decrease

答案和详解如下：

Q3. Total income tax expense for Year 1 is:

A)   $23,000.

B)   $17,000.

C)   $24,000.

Correct answer is A)

Total Income Tax Expense = Taxes Payable − Deferred Tax Asset + Deferred Tax Liability = $20,000 − 0 + 3,000 = $23,000.

Q4. Laser Tech has net temporary differences between tax and book income resulting in a deferred tax liability of $30.6 million. According to U.S. GAAP, an increase in the tax rate would have what impact on deferred taxes and net income, respectively:

          Deferred Taxes                Net Income

A)    Increase                              No effect

B)    Increase                              Decrease

C)    No effect                             Decrease

Correct answer is B)

If tax rates rise then deferred tax liabilities will also rise.  The increase in deferred tax liabilities will increase the current tax expense, and if expenses are increasing the net income will decrease.

xx