Four independent situations are described below. Each involves future deductible amounts and/or future taxable amounts produced by temporary differences:

($ in thousands)
Situation
1 2 3 4
Taxable income $85 $215 $195 $260
Future deductible amounts 15 20 20
Future taxable amounts 15 15 30
Balance(s) at beginning of the year:
Deferred tax asset 2 9 4
Deferred tax liability 2 2

The enacted tax rate is 40%.

Required:

For each situation, determine the following:

a. Income tax payable currently.
b. Deferred tax asset—balance.
c. Deferred tax asset—change (dr) cr.
d. Deferred tax liability—balance.
e. Deferred tax liability—change (dr) cr.
f. Income tax expense.

                                                                   1               2            3             4

a) Income tax payable                          $34,000  $86,000 $78,000 $104,000

b) Deferred tax Asset                           $10000                     $17000   $12000

c) Deferred tax asset Change               $6000                     $8000     $8000

d) Deferred tax liability                                         $8000       $8000     $12000

e) Deferred tax liability change                             $6000     $6000     $12000

f) Income tax expense                      $28000    $92000   $76000    $108000

Explanation:

Income tax payable = Taxable income * tax rate

Deferred tax asset = future deductible amounts *0.4 + opening balance

future deductible amount could be prepaid expense which is an asset

Deferred tax change = closing balance - opening balance

deferred tax liability = future taxable income * 0.4

Income tax expense = current tax payable + deffered tax ( liability)

                                          OR

                                   = current tax payable - deferred tax asset

to compute the deferred tax to be added to or subtracted from the current tax payable, we need the deferred tax change and if it is a asset we subtract it from current tax payable and if it is a liability we add it

c.

explanation:

regressive tax taxes the poor and less of the wealthy. this the rich get richer and the poor get more poor. this would create a large wealth gap.

the correct answer is:

it required the president to inform congress within forty-eight hours of any new troop commitment.

the war powers resolution (1973) is a federal law designed to limit the u.s. president’s ability to initiate or intensify military actions abroad without the approval of the congress.

it establishes that the president can send armed forces into action abroad only by declaration of war by congress, statutory authorization, or in case of a national emergency created by attack upon the united states, its territories or possessions, or its armed forces.

it requires the president to notify congress within 48 hours of sending armed forces to military action.