Accounting Exercises

Brief Exercise 19-9

Shetland Inc. had pretax financial income of $154,000 in 2014. Included in the computation of that amount is insurance expense of $4,000 which is not deductible for tax purposes. In addition, depreciation for tax purposes exceeds accounting depreciation by $10,000. Prepare Shetland’s journal entry to record 2014 taxes, assuming a tax rate of 45%.  (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit
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Brief Exercise 19-7

At December 31, 2014, Hillyard Corporation has a deferred tax asset of $200,000. After a careful review of all available evidence, it is determined that it is more likely than not that $60,000 of this deferred tax asset will not be realized. Prepare the necessary journal entry.  (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Account Titles and Explanation	Debit	Credit

Brief Exercise 19-2

Oxford Corporation began operations in 2014 and reported pretax financial income of $225,000 for the year. Oxford’s tax depreciation exceeded its book depreciation by $40,000. Oxford’s tax rate for 2014 and years thereafter is 30%. In its December 31, 2014, balance sheet, what amount of deferred tax liability should be reported?

Deferred tax liability to be reported

$

Brief Exercise 19-15

Youngman Corporation has temporary differences at December 31, 2014, that result in the following deferred taxes.

Deferred tax liability—current		$38,000
Deferred tax asset—current		$(62,000	)
Deferred tax liability—noncurrent		$96,000
Deferred tax asset—noncurrent		$(27,000	)

Indicate how these balances would be presented in Youngman’s December 31, 2014, balance sheet.

Youngman Corporation Balance Sheet December 31, 2014
					$
					$