[jeff]

Free Study Planner, Notes, Audio, Flashcards: https://www.another71.com/cpa-exam-study-plan/

Free CPA Exam Survival Guide: https://www.another71.com/cpa-exam-survival-guide/

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[D C]

when future accounting income tax is greater than future financial statement income

And your JE should be..

Dr Income tax expense – current XX

Dr Income tax expense – deferred XX

Cr Deferred tax liability XX

Cr Current tax liability XX

B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.

[jpowell31]

I hate JE's….it's so backwards but UGH. i'm in insurance accounting as well……..there have been a total of 4 questions in all exam study materials even relating to this.

growl.

i think jeff said there was traffic affecting the server so no signatures and no hiyas

[Anonymous]

HopefulCPA0601,

I just don't understand why can't those things be clearly articulated in the book, what is it, some kind of massive conspiracy?

Same with the pension expense entries, I had to exchange 5 messages with homework help until I got the actual entries, and they were not 100% right too

[jpowell31]

i feel the same way @anjanja – some of the entries are obvious and other times there seems to be an option. i got a JE on my last exam and thought, wow i actually know this! and the option in the drop down box wasn't even there so i second guessed everything.

[HopefulCPA0601]

@anjanja i know its absolutley ridiculous that these things are not more clear.

Also a key note to write down for deferreds

you subtract your beginning DTA and add back your beginning DTL to figure out your total deferred.

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[HopefulCPA0601]

so if you have ending dta of 20 and beginning dta of 15 – net dta is 5

if you have ending dtl of 20 and beginning dtl of 15 – net dtl is 35

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

wait, shouldn't beginning DTL be subtracted from ending to get net?

[HopefulCPA0601]

I'm goign to check my notes at home, I could have sworn I had something written down that said subtract it, I will get back to you on this!!

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[HopefulCPA0601]

okay @anjanja – the thing i was thinking of is income tax expense. So per my notes:

(taxable income + tax) + (future temps x tax) – beginning dta + ending dtl = income tax expense

Situation1:

taxable income 40,000

amounts at ye:

future deductible: 5,000

future taxable: 0

beg year balance:

dta: 1000

dtl: 0

tax 40%

current tax expense: 40,000 x 40% = 16,000

DTA= (5,000 x 40%) = 2,000 – beg 1,000 = 1,000 change in DTA (1,000 increase in DTA)

16,000 – 1,000 = 15,000 income tax expense

Situation2:

taxable income: 80,000

amounts at ye:

future deductible: 10,000

future taxable: 5,000

beg year balance:

dta: 4,000

dtl: 1,000

current tax expense: 80,000 x 40% = 32,000

DTA: (10,000 x 40%) = 4,000 – beginning 4,000 = 0 (no change)

DTL: (5,000 x 40%) = 2,000 – beginning 1,000 = 1,000 increase in DTL

32,000 – 0 + 1,000 = 33,000 tax expense

Hope that helps you!!

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[HopefulCPA0601]

correction of the formula – (taxable income x tax) — sorry type

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[Anonymous]

Thanks! Very helpful!

So in year 2 there was no change in cumulative temporary deductible difference so there is no deferred tax expense

[jpowell31]

Taft Corp uses the equity method to account for its 25% investment in Flame. During teh year, Taft received dividends of $30k from Flame and recorded $180k as equity in earnings of Flame.

-all undistributed earnings of Flame will be distributed as dividends in future periods

-the dividends received deduction is 80% and is applicable here

-enacted tax rates are 30%

What should Taft report as deferred income tax liability?

A) $54,000

B) $10,800

C) $9,000 (correct answer)

D) $45,000

Book Tax Temp difference taxable in future

equity in earnings of investee 180,000 0

dividends received 0 30,000

Less 80% DRD (144,000) (24,000)

TOTAL 36,000 – 6,000 = 30,000 x 30% = $9,000

I'm having trouble remember DRDs from REG –> why do we remove 80% equity from the books? i could look it up but i have a feeling if it's explained here I'll tie it to FAR better.

[jpowell31]

boo my table didn't copy right. there should be 3 columns “book” “tax” and “temp difference taxable in future”

[HopefulCPA0601]

Suits is on.. HOW am i supposed to focus? I guess a 1 hour break is allowed??!

BEC: 65 - 79* - 84 DONE
AUD: 65 - 76 DONE
REG: 63 - 77 DONE
FAR: 65 - 63 - 67 - 69 - 73 - 71 - 83 DONE

Becker Notes & Flashcards, Wiley Test Bank, Ninja MCQ

[D C]

180k-30k = 150k *.2 *.3=9k

B - 80
A - 71, 67, 77
R - 71, 77
F - 72, 77
DONE!!
Becker Self-study all the way! Did use Ninja Notes & Audio for FAR.

[Author]

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