Deferred Tax Paper 5


At the most recent year-end, a company had a deferred income tax liability arising from accelerated depreciation that exceeded a deferred income tax asset relating to rent received in advance which is expected to reverse in the next year. Which of the following should be reported in the company’s most recent year-end balance sheet?


On December 31, year 5, Oak Co. recognized a receivable for taxes paid in prior years and refundable through the carryback of all of its year 5 operating loss. Also, Oak had a year 5 deferred tax liability derived from the temporary difference between tax and financial statement depreciation, which reverses over the period year 6–year 10. The amount of this tax liability is less than the amount of the tax asset. Which of the following year 5 balance sheet sections should report tax-related items?
I. Current assets.
II. Current liabilities.
III. Noncurrent liabilities.


The amount of income tax applicable to transactions that are not reported in the continuing operations section of the income statement is computed


No net deferred tax asset (i.e., deferred tax asset net of related valuation allowance) was recognized in the year 1 financial statements by the Chaise Company when a loss from discontinued operations was carried forward for tax purposes because it was more likely than not that none of this deferred tax asset would be realized. Chaise had no temporary differences. The tax benefit of the loss carried forward reduced current taxes payable on year 2 continuing operations. The year 2 income statement would include the tax benefit from the loss brought forward in


Which of the following statements is correct regarding the provision for income taxes in the financial statements of a sole proprietorship?


Which of the following is true regarding reporting deferred taxes in financial statements prepared in accordance with IFRS?


Toller Corp. reports in accordance with IFRS. The controller of the company is attempting to prepare the presentation of deferred taxes on Toller’s financial statements. Which of the following is correct about the presentation of deferred tax assets and liabilities under IFRS?


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