Problem 16–1 (continued)
Requirement 2
($ in thousands)
Current Future
Year Taxable
2017 Amount
Pretax accounting income 220
Temporary difference:
Deferred Tax Liability
Deferred Tax Liability:
16–62 Intermediate Accounting, 8/e
Problem 16–1 (concluded)
Requirement 3
($ in thousands)
Current Future
Year Taxable
2018 Amount
Pretax accounting income 200
Temporary difference:
Deferred Tax Liability
Deferred Tax Liability:
10
Ending balance (balance currently needed)
$ 2
Less: beginning balance: (from 2017 calculation)
2
Problem 16–2
Requirement 1
A liability for unearned subscription revenue is created when subscriptions are
Requirement 2
($ in millions)
December 31
2016 2017 2018
Liability—Subscriptions:
$ 0 $ 40 $ 20
Requirement 3
Requirement 4
16–64 Intermediate Accounting, 8/e
Problem 16–3
Requirement 1
($ in millions)
Current Future Future
Year Taxable Taxable
2016 Amounts Amounts
2017 2018 2019 [total]
Pretax accounting income 16
Deferred Tax Liability
Deferred Tax Liability:
0
Ending balance (balance currently needed)
$ 4.8
Less: beginning balance
4.8
Journal entry at the end of 2016
16–66 Intermediate Accounting, 8/e
Problem 16–3 (continued)
Requirement 2
($ in millions)
Current Future Future
Year Taxable Taxable
2017 Amounts Amounts
2018 2019 [total]
Pretax accounting income 15
Deferred Tax Liability
Deferred Tax Liability:
4.8
Ending balance (balance currently needed)
$ 2.8
Less: beginning balance
2.8
Journal entry at the end of 2017
Problem 16–3 (concluded)
Requirement 3
The balance in the deferred tax liability account at the end of 2017 would have
been $3.2 million if the new tax rate had not been enacted:
16–68 Intermediate Accounting, 8/e
Problem 16–4
2016 2017 2018 2019
Pretax accounting income $60,000 $80,000 $70,000 $70,000
Depreciation for tax (39,600) (52,800) (18,000) ( 9,600)
Cumulative
Temporary
2016 2017 2018 2019 Difference
Straight-line 30,000 30,000 30,000 30,000
2016 2017 2018 2019
Cumulative difference $ 9,600 $32,400 $20,400 $ 0
Problem 16–4 (concluded)
Journal entry at the end of 2016
Income tax expense (to balance) 9,000
Journal entry at the end of 2017
Problem 16–5
2016 2017 2018 2019
Pretax accounting income $350,000 $270,000 $340,000 $380,000
Cumulative
Temporary
2016 2017 2018 2019 Difference
Temporary
Problem 16–5 (concluded)
Journal entry at the end of 2016
Income tax expense (to balance) 105,000
16–72 Intermediate Accounting, 8/e
Problem 16–6
Requirement 1
($ in millions)
Income tax expense (to balance) 16.4
Requirement 2
In a classified balance sheet, deferred tax assets and deferred tax liabilities
are classified as either current or noncurrent according to how the related
assets or liabilities are classified for financial reporting. The deferred tax
liabilities and deferred tax assets are offset to get the net current and the net
noncurrent amounts:
($ in millions)
Future Deferred
Classification Taxable Tax (Asset)
Related Balance current-C (Deductible) Tax Liability
Sheet Account noncurrent-NC Amounts Rate C NC
Problem 16–6 (continued)
Requirement 3
($ in millions) Current Future Taxable Deferred
Year (Deductible) Tax
2016 Amounts Liab. Asset
2017 2018 2019
Pretax accounting income 41
Temporary differences:
Depreciation (30) 30*
Deferred
Tax
Liab. Asset
Ending balances (balances currently needed) $14.1 $2.1
16–74 Intermediate Accounting, 8/e
Problem 16–6 (concluded)
* When a portion of a temporary difference has yet to originate, as in the
case of depreciation here, only the reversals of the temporary difference
at the balance sheet date ($30) can be scheduled. Future originations
Problem 16–7
Requirement 1
($ in millions)
Future
Current Taxable Future Future
Year (Deductible) Taxable Deductible
2016 Amounts Amounts Amounts
2017 2018 [total] [total]
Pretax accounting income 76
Permanent difference:
Fine paid 2
Deferred Tax Asset
Deferred Tax Liability
1.2
2.8
10.0
Deferred
Tax
Liab. Asset
Ending balances (balances currently needed) $10.0 $3.6
16–76 Intermediate Accounting, 8/e
Problem 16–7 (continued)
Journal entry at the end of 2016
Income tax expense (to balance) 31.2
Problem 16–7 (concluded)
Requirement 3
($ in millions)
Future Deferred
Classification Taxable Tax (Asset)
Related Balance current-C (Deductible) Tax Liability
Sheet Account noncurrent-NC Amounts Rate C NC
Receivable—Installment sales C 2 x 40% .8
Current Assets:
Deferred taxes $ 1.6
16–78 Intermediate Accounting, 8/e
Problem 16–8
Requirement 1
The expense for life insurance premiums is a permanent difference each year
Problem 16–8 (continued)
Requirement 2
Current Future Future
($ in millions) Year Taxable Deductible
2016 Amounts Amounts
[2017] [2017]
Pretax accounting income 128
Permanent difference:
Life insurance premiums 2
Deferred Tax Asset
Deferred Tax Liability
6
0
12
16–80 Intermediate Accounting, 8/e
Problem 16–8 (continued)
Journal entry at the end of 2016
Income tax expense (to balance) 52
* Temporary difference for subscriptions:
2015 2016 2017
Earned in current yr. (reported on income statement) $25 $33
Requirement 3
Because all accounts related to the temporary differences (prepaid