Which of the following causes a permanent difference between taxable income and pretax accounting income?

A-The installment method used for sales of property.

B-MACRS depreciation method used for equipment.

C-Interest income on municipal bonds.

D- Percentage-of-completion method for long-term construction contracts.

At the end of the current year, Newsmax Inc. has $400,000 of subscriptions received in advance included in its balance sheet. A disclosure note reveals that the entire $400,000 will be earned in the next year. In the absence of other temporary differences, in the balance sheet one would also expect to find a:

A-Noncurrent deferred tax liability.

B-Noncurrent deferred tax asset.

C-Current deferred tax liability.

D-Current deferred tax asset.

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

Pretax accounting income:	$200
Pretax accounting income included:
Overweight fines (not deductible for tax purposes)	5
Depreciation expense	70
Depreciation in the tax return using MACRS:	110

The applicable tax rate is 40%. There are no other temporary or permanent differences. Which of the following must Franklin Freightways disclose related to the income tax expense reported in the income statement ($ in millions)?

A-Only the current portion of tax expense of $66.

B-Only the total tax expense of $82.

C-Both the current portion of the tax expense of $66 and the deferred portion of the tax expense of $16.

D-None of these answer choices are correct.

Of the following temporary differences, which one ordinarily creates a deferred tax asset?

A-Intangible drilling costs.

B-MACRS depreciation.

C-Rent received in advance.

D-Installment sales.

Information for Kent Corp. for the year 2016: Reconciliation of pretax accounting income and taxable income:

Pretax accounting income	$180,000
Permanent differences	(15,000)
	165,000
Temporary difference-depreciation	(12,000)
Taxable income	$153,000

Cumulative future taxable amounts all from depreciation temporary differences:

As of December 31, 2015	$13,000
As of December 31, 2016	$25,000

The enacted tax rate was 30% for 2015 and thereafter. What should Kent report as the current portion of its income tax expense in the year 2016?

A-$45,900.

B-$49,500.

C-$54,000.

D-None of these answer choices are correct

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

Pretax accounting income:	$200
Pretax accounting income included:
Overweight fines (not deductible for tax purposes)	5
Depreciation expense	70
Depreciation in the tax return using MACRS:	110

The applicable tax rate is 40%. There are no other temporary or permanent differences. Franklin's balance sheet at the end of its first year would report:

A-A deferred tax liability of $16 among noncurrent liabilities.

B-A deferred tax liability of $16 among current liabilities.

C-A deferred tax asset of $16 among noncurrent assets.

D-A deferred tax asset of $16 among current assets.