X Company reported in the income statement for the current year pre tax of 400,000. The following items are treated differently on the tax return and on the book: PER TAX RETURN: Royalty income 20,000 Depreciation expense125,000 Payment of penalty zero PER BOOK : royalty income 300,000 ; Depreciation expense 100,000; Payment of penalty 15,000. The enacted tax rate for the current year is 30% and 25% for all future years . What amount should be reported as total tax expense?*

112,500

109,500

99,750

122,250

X Company is in the business of leasing new sophisticated equipment. The lessor expect a 12% return on net investment. All leases are classified as direct financing lease. At the end of the lease term, the equipment will not revert to the lessor. At the beginning of the current year, an equipment is leased to a lessee with the following information. Cost of equipment to the lessor 5,000,000; Residual value-unguaranteed 600,000; annual rental payable at the beginning of each year 900,000 , Initial direct cost incurred by the lessor 250,000 ; Useful life and lease term 8 years; Implicit interest rate after initial direct cost 12% . What is the total unearned interest income over the lease term?*

1,950,000

3,150,000

1,500,000

2,550,000

Statement 1: Taxable Temporary differences are differences that will result in future taxable amount in determining taxable income of future periods. Statement 2: Deductible temporary difference are differences that result in future deductible amount in determining taxable income in future periods. Statement 3: Total income tax expense is the amount of income tax payable in respect to taxable income.*

All of the statements are true

Only one statement is true

None of the statement are true

Only two statements are true

X Company reported in the income statement for the current year pre tax of 400,000. The following items are treated differently on the tax return and on the book: PER TAX RETURN: Royalty income 20,000 Depreciation expense125,000 Payment of penalty zero PER BOOK : royalty income 300,000 ; Depreciation expense 100,000; Payment of penalty 15,000. The enacted tax rate for the current year is 30% and 25% for all future years . How much is the net deferred tax expense?*

1,500 net deferred tax benefit

11,250 net deferred tax benefit

1,500 net deferred tax expense

11,250 net deferred tax expense