Deferred income taxes: temporary or permanent difference

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• Difference between an originating temporary difference

  So, your entry will be: DEBIT: Tax expense 28,500 CREDIT: Deferred taxes 1,500 CREDIT: Taxes payable 27,000 If you didn't understand temporary versus permanent differences, you would not know when to set up a deferred tax liability or deferred

• Temporary difference and permanent difference

  Deferred income taxes are calculated to show the reduction or increase in future taxes when a temporary difference reverses itself.

• This addresses taxable & financial income & deferred assets.

  A permanent difference would result from a company acquiring another company at above or below cost, causing a permanent loss/gain respective to the acquisition.

• Bandung Corporation began 2007 with a $92,000 balance in the

  444710 Temporary and permanent differences, deferred tax, carryback and carryforward of NOL (One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes) Bandung Corporation began 2007 with a $92,000 balance in the Deferred Tax

• Permanent and Temporary Tax Differences

  How are deferred tax assets and deferred tax liabilities derived? How do they relate to the difference between tax expense and taxes payable? How could an organization have a tax receivable?

• Reconciling Pretax Income and Taxable Income

  The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2007.

• Memo: Income Statement Change to Balance Sheet

  Deferred tax assets and liabilities are the results of permanent and temporary differences. Permanent Differences Permanent differences result from transactions which affect either taxable income or accounting income, but not both.

• Computing, Journalizing and Presenting Deferred Income Taxes

  Using an Excel 97-2003 worksheet, this solution demonstrates how to compute taxable income when temporary and permanent differences exist, and journalize and present current and deferred income taxes.

• Fill in the blanks statements about deferred income tax, timing differences, and valuation.

  B) If a $76,000 balance in Deferred Tax Asset was computed by use of a 40% rate, the underlying cumulative temporary difference amounts to $_____________. C) Deferred taxes ________ (are, are not) recorded to account for permanent differences.