Problem 16-11

Accounting Income 9,000,000 2250000 DTE

Temporary tax difference -4,000,000 -1000000 DTL
Deductible tax difference 2,500,000 625000 DTA

7,500,000 1875000 Income tax payable

Requirement 1

Income tax expense 1875000

Income tax payable 1875000

Requirement 2

Income tax expense 1,000,000

Deferred tax liability 1,000,000

Requirement 3

Deferred tax asset 625000

Income tax expense 625000

Requirement 4
Net deferred tax expense 375,000
Requirement 5
Total Income Tax 2250000

Requirement 6

Income before tax 9,000,000

Income tax expense 2,875,000
Income tax benefit 625000 2,250,000

Net Income 6,750,000