Deferred taxes Calculated tax expense, taxes payable and deferred tax amounts

wk1_deferred_taxes.xlsx

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Worksheet

DEFERRED TAXES										Don't enter anything in, or delete these columns
Section 1 - Calculation of tax expense, taxable payable & deferred tax amounts										Points	Comments
				2013	2014	2015	2016	2017	Total
	Income before tax			720,000	800,000	690,000	730,000	720,000
	Differences between book and tax income
	Depreciation expense		Per books	10,000	10,000	10,000	10,000	10,000	50,000
			Per tax return	50,000					50,000
			Difference	(40,000)	10,000	10,000	10,000	10,000	- 0
	Interest revenue from		Per books	10,000	10,000	10,000	10,000	10,000	50,000
	municipal bonds		Per tax return	- 0	- 0	- 0	- 0	- 0	- 0
			Difference	10,000	10,000	10,000	10,000	10,000	50,000
	Royalty revenue		Per books	25,000	25,000	25,000	25,000		100,000
			Per tax return	100,000					100,000
			Difference	(75,000)	25,000	25,000	25,000	- 0	- 0
	(a) Calculate income tax expense			2013	2014	2015	2016	2017
										15.0
		Income tax expense
	(b) Calculate income tax payable			2013	2014	2015	2016	2017
										15.0
		Income tax payable
	(c) Calculate deferred tax amounts			2013	2014	2015	2016	2017
		Current
										15.0
		Net current tax assets (liabilities)
		Non-Current
		Net non-current tax assets (liabilities)
		Total deferred tax assets (liabilities)		- 0	- 0	- 0	- 0	- 0
	(d) Prepaire entries to record income tax expense, income tax payable and deferred taxes
		2013		Debit	Credit
										5.0
		2014		Debit	Credit
										5.0
										55.0
Section 2 - Presentation in financial statements
	(a) Summary Income Statement			2013	2014	2015	2016	2017
		Income before taxes								10.0
		Income tax expense
		Current
		Deferred
		Total income tax expense		- 0	- 0	- 0	- 0	- 0
		Net income		- 0	- 0	- 0	- 0	- 0
	(b) Selected Balance Sheet Items			2013	2014	2015	2016	2017
		Assets
		Current tax assets								5.0
		Non-current tax assets
		Liabilities
		Current tax liabilities
		Non-current tax liabilities
										15.0
Section 3 - Valuation allowance
	Before closing books for 2013, Company determines $2,000 of deferred tax asset related to depreciation will not be realized
	(a) Prepare entry for deferred tax valuation allowance
		2013		Debit	Credit
										5.0
	(b) Balance sheet presentation deferred tax asset and valuation
		Assets
		Non-current tax assets								5.0
		Less: valuation allowance
		Deferred tax asset (net)		- 0
										10.0
										80.0

Grade

WEEK 1 - DEFERRED TAXES
Criteria	Possible Points	%	Comments	Actual Points
Section 1 - Calculation of tax expense, taxable payable & deferred tax amounts	55.0	61%	See worksheet for comments	55.0
Section 2 - Presentation in financial statements	15.0	17%		15.0
Section 3 - Valuation allowance	10.0	11%		10.0
CONTENT	80.0	89%		80.0
Utilizes provided layout correctly	10.0	11%
MECHANICS	10.0	11%		0.0
TOTAL ASSIGNMENT	90.0	100%		80.0	89%