1. Kensington had this info at the end of 2015, its first year of operations: No other permanent or temporary differences exist. The prepaid expense will be expensed in 2018; the depreciation will reverse evenly over the next three years. Tax rate is 30%. Future net income is probable. The 12/31/15 Income Tax Payable is:

Select one: a. $60,000 b. $240,000 c. $210,000 d. $180,000 e. $360,000

2. Which of the following requires interperiod tax allocation?

Select one:

a. Discontinued Operations Loss

b. Municipal bond interest revenue

c. The excess of accelerated depreciation used for tax purposes over straight-line depreciation used for financial reporting purposes

d. All differences between taxable income and financial statement earnings

3. Which of the following differences would result in future taxable amounts (DTLs)?

Select one:

a. Expenses or losses that are deductible after they are recognized in financial income

b. Revenue or gains that are taxable before they are recognized in financial income

c. Expenses or losses that are deductible before they are recognized in financial income

d. Revenues or gains that are recognized in financial income but are never recognized as revenue or gain for tax purposes

e. Expenses or losses that are deducted from financial income but never deductible for tax purposes

Pretax book income Prepaid expense Excess of tax over book depreciation Interest Income on municipal bonds S 800.000 300,000 200,000 100.000