Deferred Tax Assets and Liabilities: Accounting Assignment

Summary

Deferred tax assets and liabilities are temporary differences between financial reporting and tax reporting. Students learn how to classify and report these amounts in a balance sheet.

Deferred Tax Balance Sheet

Deferred tax assets and liabilities arise from temporary differences. Students classify and report these amounts for a corporation. The tax rate is given.

Multiple Tax Rates

Students calculate deferred tax liabilities for a company with installment sales. Different tax rates apply to different years. The company's accounting income and taxable income differ.

Pension Expense Calculation

Students determine the pension expense for a company with a defined benefit pension plan. They prepare journal entries to record the pension expense, funding, and payments.

Deferred Tax Journal Entries

Students record income taxes for a year and prepare journal entries. They classify and report deferred tax amounts in a balance sheet. The enacted tax rate is the same each year.

Key terms

Deferred tax assets

Amounts that reduce taxable income in future periods.

Deferred tax liabilities

Amounts that increase taxable income in future periods.

Temporary differences

Differences between financial reporting and tax reporting that reverse in future periods.

Defined benefit pension plan

A pension plan where the employer promises a specified pension payment.

PBO

Projected benefit obligation, the actuarial present value of promised retirement benefits.

AOCI

Accumulated other comprehensive income, a component of shareholders' equity.

Questions this document helps with

• How do you classify deferred tax assets and liabilities?
• What are temporary differences in accounting?
• How do you calculate pension expense for a defined benefit plan?

Summary written with AI from the document's text.