[kettik]

I’m a little confused with this sim.

So there’s a bunch of numbers – differences between tax and GAAP, some of them are permanent, some temporary.

The assignment is to create a worksheet of temp differences.

The solution shows Accumulated depreciation in excess of GAAP and Allowance for uncollectables as differences.

How come it’s not Depreciation Expense and Bad Debt Expense for the actual period. Why is it all accumulated?

[Anonymous]

Well, if it were just for the period, then yeah, it should show “Depreciation taken in excess of GAAP” and “Bad Debt Expense”, etc. However, those items result in balance sheet items (Deferred Tax Liability and Deferred Tax Asset, respectively). So it may just be telling you that the running total in those liability and asset accounts are named as “Accum. Depr. in Excess of GAAP and Allowance”. Not sure if that answered your question. Good luck with the studying!

[kettik]

Yeah it would make sense if the asked for deferred tax assets and liabilities. Bit it says “you have been assigned to compute the company's deferred portion of federal income taxes”, which I assume is only the current portion of all deferred taxes… I don't know.

[Author]

Replies