1.

ssume that Shoreline Hotel Inc., (SHI) decides to make the following entry on December 31, 2018. Current tax rate is 40%.

DR Current income tax expense $634,800

CR Income tax payable $634,800

This would imply that

Select one:

a.

the taxable income for 2018 was different than the accounting income.

b.

the income tax expense reported by SHI on its income statement would be $750,000.

c.

the taxable income for 2018 was determined to be $1,587,000.

d.

All of the above.

e.

None of the above.

2.

Assume that Betamax Inc. on December 31, 2019, carried balances in the following three accounts as stated below. The tax rate is 40%.

Capital Assets $2,304,000 [UCC Balance $3,828,000]; reversible over the next 10 years;

Warranty Liability $237,000 reversible when the liability is settled.

Installment Sales $ 48,000 reversible equally over the next two years.

If Betamax reported under IFRS, how would the Deferred Tax Asset/Liability be reported?

Select one:

a.

$609,600 as a Long Term Liability; $94,800 as a Current Asset; and $19,200 as a Current Liability.

b.

$609,600 as a Long Term Asset; $94,800 as a Current Asset; and $19,200 as a Current Liability.

c.

$609,600 as a Long Term Liability; $75,600 as a Current Asset.

d.

$685,200 as a Long Term Asset.

e.

Cannot be determined from the given data.