Q15. An analyst gathered the following information about a company:

• Taxable income = $100,000.

• Pretax income = $120,000.

• Current tax rate = 20%.

• Tax rate when the reversal occurs will be 10%.

What is the company's tax expense?

A)   $22,000.

B)   $24,000.

C)   $10,000.

Q16. Graphics, Inc. has a deferred tax asset of $4,000,000 on its books. As of December 31, it became more likely than not that $2,000,000 of the asset’s value may never be realized because of the uncertainty of future income. Graphics, Inc. should:

A)   not make any adjustments until it is certain that the tax benefits will not be realized.

B)   reverse the asset account permanently by $2,000,000.

C)   reduce the asset by establishing a valuation allowance of $2,000,000 against the asset.

Q17. A dance club purchased new sound equipment for $25,352. It will work for 5 years and has no salvage value. Their tax rate is 41%, and their annual revenues are constant at $14,384. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35% in years 1 and 2 and 30% in Year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the tax payable for year one?

A)   $779.

B)   $1,909.

C)   $2,259.

Q18. What is the deferred tax liability as of the end of year one?

A)   $1,909.

B)   $1,559.

C)   $1,129.

Q19. What is the deferred tax liability as of the end of year three?

A)   $780.

B)   $4,158.

C)   $1,029.

答案和详解如下：

Q15. An analyst gathered the following information about a company:

• Taxable income = $100,000.

• Pretax income = $120,000.

• Current tax rate = 20%.

• Tax rate when the reversal occurs will be 10%.

What is the company's tax expense?

A)   $22,000.

B)   $24,000.

C)   $10,000.

Correct answer is A)

Deferred tax liability = (120,000 − 100,000) × 0.1 = 2,000

Tax expense = current tax rate × taxable income + deferred tax liability

0.2 × 100,000 + 2,000 = 22,000

Q16. Graphics, Inc. has a deferred tax asset of $4,000,000 on its books. As of December 31, it became more likely than not that $2,000,000 of the asset’s value may never be realized because of the uncertainty of future income. Graphics, Inc. should:

A)   not make any adjustments until it is certain that the tax benefits will not be realized.

B)   reverse the asset account permanently by $2,000,000.

C)   reduce the asset by establishing a valuation allowance of $2,000,000 against the asset.

Correct answer is C)          r

If it becomes more likely than not that deferred tax assets will not be fully realized, a valuation allowance that reduces the asset and also reduces income from continuing operations should be established.

Q17. A dance club purchased new sound equipment for $25,352. It will work for 5 years and has no salvage value. Their tax rate is 41%, and their annual revenues are constant at $14,384. For financial reporting, the straight-line depreciation method is used, but for tax purposes depreciation is accelerated to 35% in years 1 and 2 and 30% in Year 3. For purposes of this exercise ignore all expenses other than depreciation.

What is the tax payable for year one?

A)   $779.

B)   $1,909.

C)   $2,259.

Correct answer is C)          r

Tax payable for year one will be $2,259 = [{$14,384 − ($25,352 × 0.35)} × 0.41].

Q18. What is the deferred tax liability as of the end of year one?

A)   $1,909.

B)   $1,559.

C)   $1,129.

Correct answer is B)         

The deferred tax liability for year 1 will be $780.
Pretax Income = $9,314 ( $14,384 − $5,070).
Taxable Income = $5,511 ($14,384 − $8,873).
Deferred Tax liability = $1,559 [($9,314 − $5,511)(0.41)].

Q19. What is the deferred tax liability as of the end of year three?

A)   $780.

B)   $4,158.

C)   $1,029.

Correct answer is B)         

The deferred tax liability at the end of year 3 will be $4,158 ($1,559 + $1,559 + $1,040).
Pretax Income = $9,314 = ( $14,384 − $5,070).
Taxable Income = $6,778 = [$14,384 − ($25,352 × 0.30)].
Deferred Tax liability for year 3 = $1,040 = [($9,314 − $6,778)(0.41)].

Deferred Tax liability for year 1 = $1,559 = [($9,314 − $5,511)(0.41)].
Deferred Tax liability for year 2 = $1,559 = [($9,314 − $5,511)(0.41)].

THANKS

那就这样吧

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