Home / My Courses / ACC211_6387_2021-2022_2NDSEM-SEM_CAE / Week 17 to 18- 8th Exam Coverage / Accounting for Income Tax

Question 1
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       These are differences that will result in future

taxable amounts in determining taxable
profit of future periods.

Select one:
a.        Permanent differences

b.         Temporary
differences

c.
       Taxable temporary differences

d.        Deductible temporary differences

Clear my choice

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 Question 2
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  Grim Company reported pretax accounting

income of 200,000 and taxable income of
150,000 for the current year.
The difference is due to the following:
Interest income on saving deposit                                                            70,000

Premium expense on keyman life insurance                                         (20,000)

Total                                                                                                                      50,000

 
The income tax rate is 30%.

 
What amount should be reported as current
provision for income tax expense in the
income statement for the current year? 

Answer Format:  10000

Answer: 45000

Question 3
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 In 2019,
Tiger Company reported pretax financial income of 5,000,000.  Included in the
pretax financial income are
900,000 of nontaxable life insurance proceeds received as a
result of the death
of an officer, 1200,000 of estimated warranty expenses accrued on
December 31,
2019 and 200,000 of life insurance premiums for a policy for an officer.

No income tax was previously paid during the year and the
income tax rate is 30%.
What is the income tax payable on December 31,
2019?

Answer Format:  1000000

Answer: 1650000

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 Question 4
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   Herbie
Company has cumulative taxable temporary differences on December 31, 2019
and
December 31, 2018 of 1,350,000 and 960,000 respectively.
 
The tax rate enacted for 2019 is 40% while
the tax rate enacted for future years is 30%.

 
Taxable income for 2019 is 2,400,000 and there
are no permanent differences.

 
What is the pretax financial income for 2019? 

Answer Format:  1000000

Answer: 2790000

Question 5
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   Cord
Company reported the following items for the current year:

Payment of penalty                                                                                                         50,000

Insurance premium on life of an officer
with Cord as beneficiary                 100,000

 
What is the total amount of temporary
differences?

Answer Format:  5

Answer: 0

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 Question 6
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  On January 1, 2019, Bolton Company

reported a deferred tax liability of 1,000,000 and
deferred tax asset of
400,000.  On December 31, 2019, the
entity reported a deferred tax
liability of 1,500,000 and a deferred tax asset
of zero.
 

What is the net deferred tax expense for the

current year? 

Answer Format:  500000

Answer: 900000

Question 7
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  Canterbury company has one temporary difference

at the end of 2019 that will reverse
and cause taxable amounts of 1,100,000 in
2020, 1,200,000 in 2021 and 1,200,000 in 2022.
The entity has also a deductible temporary
difference of 1,500,000.  The pretax
accounting
income for 2019 is 6,000,000 and the tax rate is 30%.  There are no deferred taxes at the
beginning
of 2019.

 
What is the net deferred tax expense for 2019?

Answer Format:  500000

Answer: 600000

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