$2.$ Which of the following creates a deferred tax asset due to its respective treatment on the books versus the tax return?

a$.$ Revenues reported on the income statement now, but on tax return later

b$.$ Revenues reported on the tax return now, but on income statement later

c$.$ None of the other options

d$.$ Expenses reported on the income statement now, but on tax return later

$3.$ During $2020,$ Sunmon enterprises received cash of $140,000$ for magazine subscriptions. $32,000$ of these will not be delivered until $2021,$ enacted tax rate for $2020$ is $30\%$ and $25\%$ for $2021.$ What amount should be reported in the $2020$ balance sheet for DTA?

a$.8,000$

b$.9,600$

c$.29,250$

d$.35,100$

$7.$ A valuation allowance:

a$.$ Will be added to the ending balance of the DTA account

b$.$ Is created if taxable income is anticipated to be insufficient to realize the future tax benefit

c$.$ Is used if it is more likely than not that all of the DTA will be realized

d$.$ Is reevaluated at the end of each reporting period to determine if it should be adjusted up or down.

Use information below to answer #$8-9$

Homgreen Inc. reported $500,000$ pretax accounting income for $2018,$ its first year of operations. Included in the income statement was an installment sale of property in the amount of $80,000.$ However, for tax purposes, Homgreen inc reported the income in the year the cash was collected. Cash collected on the installment sale was $50,000$ in $2019$ and $30,000$ in $2020.$ In $2018,$ homegreen inc also had $20,000$ in cash proceeds from an executives life insurance contract. The income tax rate is $35\%$

$8.$ What is the income tax expense in the $2018$ income statement?

a$.140,000$

b$.161,000$

c$.168,000$

d$.189,000$

$9.$ Using the same information in the previous question:

Assume the pretax accounting income is $610,000$ in $2019.$ There are no other additional permanent or temporary differences. What is the tax expense for $2019?$

a$.248,500$

b$.213,500$

c$.241,500$

d$.231,000$