Deferred taxes calculated tax expense, taxes payable and deferred tax

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Assignment:

WA Smith & Company had the following results of operations for the years 2013 thru 2017.

The company uses the asset-liability method to account for deferred taxes. The below table summarizes the differences in accounting between GAAP and tax regulations. Assume that these are the only deferred tax items over the 5 year period and that the company has a 40% tax rate each year.

SECTION 1 – Calculation of tax expense, taxable payable & deferred tax amounts

Deliverables:
1(a) Calculate income tax expense for each year

1(b) Calculate income tax payable for each year

1(c) Calculate current and non-current deferred tax amounts for each year

1(d) Prepare the entries to record income tax expense, income tax payable and deferred taxes for 2013 and 2014

SECTION 2 – Presentation in financial statements

Deliverables:
2(a) Complete the summary income statements for each year

2(b) Compete the deferred tax amounts on the balance sheet for each year

SECTION 3 – Valuation allowance

Before closing the books for 2013, the company determines $2,000 of the deferred tax asset related to depreciation will not be realized.

Deliverables:
3(a) Record the entry for the deferred tax valuation allowance

3(b) Complete the balance sheet presentation for the deferred tax asset and valuation allowance

This is the form that will be used to grade your assignment: