12.Which of the following is an example of a change in reporting entity?

Multiple Choice

• A change in the actuarial life expectancies of employees under a pension plan.

• A change in inventory costing methods.

• Consolidating a new subsidiary.

• A change in the estimated useful life of a depreciable asset.

16.

Illini Inc. operates in two independent tax jurisdictions of Bears and Packers. Its has the following information of its deferred tax assets and liabilities:

Bears:

Deferred tax asset of $5 million

Valuation allowance of $1 million

Deferred tax liability of $14 million

Packers:

Deferred tax asset of $18 million

Deferred tax liability of $2 million

Illini files separate tax returns in Bears and Packers. Illini's balance sheet should have the following disclosure of deferred tax assets and liabilities:

Multiple Choice

• A deferred tax asset of $6 million.

• A deferred tax liability of $9 million and a deferred tax asset of $20 million.

• A deferred tax liability of $9 million and a deferred tax asset of $16 million.

• A deferred tax liability of $10 million and a deferred tax asset of $16 million.