1). Canner Co., organized on January 2, 2020, had pretax accounting income of $960,000 and taxable income of $3,120,000 for the year ended December 31, 2020. The only temporary difference is accrued product warranty costs which are expected to be paid as follows: 2021 $720,000 2022 360,000 2023 360,000 2024 720,000 The enacted income tax rates are 35% for 2020, 30% for 2021 through 2023, and 25% for 2024. If Canner expects taxable income in future years, the deferred tax asset in Canner's December 31, 2020 balance sheet should be a. $432,000 b. $504,000 c. $612,000 d. $756,000

2). Ames Corp. prepared the following reconciliation of income per books with income per tax return for the year ended December 31, 2020: Book income before income taxes 2,700,000 Add temporary difference Construction contract revenue which will reverse in 2021 240,000 Deduct temporary difference Depreciation expense which will reverse in equal amounts in each of the next four years (960,000) Taxable income 1,980,000 The enacted income tax rate is 21% in 2020. How should Ames report deferred taxes? a. DTA (current) 50,400; DTL (noncurrent) 201,600. b. DTL (noncurrent) 201,600 c. DTL (noncurrent) 151,200 d. DTL (noncurrent 100,800

3). Baker Corp.'s 2020 income statement had pretax financial income of $500,000 in its first year of operations. Baker uses an accelerated cost recovery method on its tax return and straight-line depreciation for financial reporting. The differences between the book and tax deductions for depreciation over the five-year life of the assets acquired in 2020, and the enacted tax rates for 2020 to 2024 are as follows: Book Depreciation Over (Under) Tax Tax Rates 2020 (100,000) 35% 2021 (130,000) 30% 2022 (30,000) 30% 2023 120,000 30% 2024 140,000 30% There are no other temporary differences. In Baker's December 31, 2020 balance sheet, the noncurrent deferred income tax liability and the income taxes currently payable should be Deferred Income Income Taxes Tax Liability Currently Payable a. $78,000 $100,000 b. $78,000 $140,000 c. $30,000 $120,000 d. $30,000 $140,000