Deferred tax asset and deferred tax liability amounts

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Reference no: EM13880234

orning Howell reported taxable income in 2013 of $120 million. At December 31, 2013, the reported amount of some assets and liabilities in the financial statements differed from their tax bases as indicated below:

.:.The total deferred tax asset and deferred tax liability amounts at January 1, 2013, were $250 million and $40 million, respectively. The enacted tax rate is 40% each year.
Required:
1. Determine the total deferred tax asset and deferred tax liability amounts at December 31, 2013.
2. Determine the increase (decrease) in the deferred tax asset and deferred tax liability accounts at December 31, 2013.
3. Determine the income tax payable currently for the year ended December 31, 2013.
4. Prepare the journal entry to record income taxes for 2013.
5. Show how the deferred tax amounts should be classified and reported in the 2013 balance sheet.

Reference no: EM13880234

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