Munabhai Times-Roman Publishing Company reports the following amounts in its first three years of operation:($ in thousands)Pretax accounting incomeTaxable income2024$ 3503902025$ 3602026$ 320340360The difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazinesubscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when theperformance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future.Required:1. What is the balance sheet account that gives rise to a temporary difference in this situation?2. For each year, indicate the cumulative amount of the temporary difference at year-end.3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred taxliability?Complete this question by entering your answers in the tabs below.Req 1Req 2 and 3What is the balance sheet account that gives rise to a temporary difference in this situation?1. What is the balance sheet account that gives rise to a temporary difference in this situation?< Req 1Req 2 and 3 >

On a company's balance statement, deferred subscription revenue is listed as a liability. Because…

oman Pubi ing ompany reports the following amounts in its first three years of opera ($ in thousands) Pretax accounting income Taxable income 2024 $ 350 390 2025 $ 360 2026 $ 320 340 360 he difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine bscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the erformance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future equired: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability?

oman Pubi ing ompany reports the following amounts in its first three years of opera ($ in thousands) Pretax accounting income Taxable income 2024 $ 350 390 2025 $ 360 2026 $ 320 340 360 he difference between pretax accounting income and taxable income is due to subscription revenue for one-year magazine bscriptions being reported for tax purposes in the year received, but reported in the income statement in later years when the erformance obligation is satisfied. The income tax rate is 25% each year. Times-Roman anticipates profitable operations in the future equired: 1. What is the balance sheet account that gives rise to a temporary difference in this situation? 2. For each year, indicate the cumulative amount of the temporary difference at year-end. 3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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