1)Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo:

Tambura:

Deferred tax asset of $18 million

Valuation allowance of $15 million

Deferred tax liability of $27 million

Nileboo:

Deferred tax asset of $57 million

Deferred tax liability of $16 million

Brady files separate tax returns in Tambura and Nileboo. Bradys balance sheet would include the following disclosure of deferred tax assets and liabilities:

Multiple Choice

• A deferred tax asset of $17 million.

• A deferred tax liability of $30 million and a deferred tax asset of $47 million.

• A deferred tax liability of $45 million and a deferred tax asset of $62 million.

• A deferred tax liability of $24 million and a deferred tax asset of $41 million.

2)

The following information relates to Franklin Freightways for its first year of operations (data in millions of dollars):

Pretax accounting income:	$	1,131
Pretax accounting income included:
Overweight fines (not deductible for tax purposes)		5
Depreciation expense		160
Depreciation in the tax return		560

The applicable tax rate is 25%. There are no other temporary or permanent differences.

Franklin's balance sheet at the end of its first year would report:

Multiple Choice

• A deferred tax liability of $100 million among noncurrent liabilities.

• A deferred tax liability of $100 million among current liabilities.

• A deferred tax asset of $100 million among noncurrent assets.

• A deferred tax asset of $100 million among current assets.