I just need help with the last one 2020 Problem 162 Temporar

I just need help with the last one: 2020!

Problem 16-2 Temporary difference; determine deferred tax amount for three years [LO16-2] Times-Roman Publishing Company reports the following amounts in its first three years of operation ( in 000s) Pretax accounting income Taxable income $350 390 $330 340 2020 320 360 The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine subscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the performance obligation is satisfied. The income tax rate is 40% each year. Times-Roman anticipates profitable operations in the future Required: 1. What is the balance sheet account for which a temporary difference is created by this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. (Enter your answers in thousands.) 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter your answers in thousands.) What is the balance sheet account for which a temporary difference is created by this situation? Deferred subscription revenue December 31 2018 2019 2020 40$ 16 $ 2. Temporary difference 50 ferred tax asset 20

Solution

Explanation 2018 2019 2020 Income as per books B $350 330 320 Income as per tax T $390 340 360 Temporray difference Beginning bal 0 40 50 Current year (T-B) $40 10 40 Temporray difference 40 50 90 % of tax 40% 40% 40% DTA 16 20 36 answer should be for 2020 Temorary difference $90 Deferred tax asset 36 If any doubt please comment. If satisfied you can rate