The first year of operations for Grayton Company is 2015. Given this information for 2015:

Pretax book income $800,000 Estimated litigation expense 200,000 Excess of tax over book depreciation 100,000 Interest Income on municipal bonds 100,000

No other permanent or temporary differences exist. The litigation item will be paid in 2016 . The depreciation will reverse evenly over the next three years. Tax rate is 30%. Future net income is probable.

Indicate the proper deferred tax amounts to appear on the 12/31/15 balance sheet.

Select one: a. A noncurrent liability of $30,000 b. A current asset of $60,000 and a noncurrent liability of $90,000 c. A noncurrent asset of $60,000 and a noncurrent liability of $90,000 d. A current liability of $30,000 and a noncurrent liability of $20,000 e. A noncurrent asset $30,000

The Tempe Co. incurred the following income and losses: Assume that Tempe opts to carry back its loss for tax purposes. The Tax Rate is 30% in all years. If realization of future tax savings is assured beyond any doubt, what is the 2016 final net loss to appear on the income statement?

Select one:

a. $140

b. $264

c. $152

d. $120

e. $136

The Destin Company has one temporary difference of $160 caused by accelerated tax depreciation on 12/31/14. The difference will reverse evenly over the next four years. Tax Rates are 20% in 2014, 30% in 2015, and 40% in 2016 and beyond. Pretax book income in 2014 is $1,000. What is 2014 Income Tax Expense?

Select one:

a. $260

b. $290

c. $108

d. $228

e. $212

Pretax Income (loss) S100 $60 ($200)