Question 1.1.(TCO B) Zeff Co. prepared the following reconciliation of its pretax financial statement income to taxable income for the year ended December 31, Year 1, its first year of operations:Pretax financial income $160,000Nontaxable interest received on municipal securities (5,000)Long-term loss accrual in excess of deductible amount 10,000Depreciation in excess of financial statement amount (25,000)Taxable income$140,000Zeff's tax rate for Year 1 is 40%.In its December 31, Year 1, balance sheet, what should Zeff report as deferred income tax liability?(Points : 5)

$2,000$4,000$6,000$8,000

Question 2.2.(TCO B) Mobe Co. reported the following operating income (loss) for its first three years of operations:Year 1 $ 300,000Year 2 (700,000)Year 3 1,200,000For each year, there were no deferred income taxes (before Year 1), and Mobe's effective income tax rate was 30%. In its Year 2 income tax return, Mobe elected the two year carry back of the loss. In its Year 3 income statement, what amount should Mobe report as total income tax expense?(Points : 5)

$120,000$150,000$240,000$360,000

Question 3.3.(TCO B) Hut Co. has temporary taxable differences that will reverse during the next year and add to taxable income. These differences relate to noncurrent assets. Under U.S. GAAP, deferred income taxes based on these temporary differences should be classified in Hut's balance sheet as a:(Points : 5)

Current asset.Noncurrent asset.Current liability.Noncurrent liability.

Question 4.4.(TCO B) In Year 2, Ajax, Inc. reported taxable income of $400,000 and pretax financial statement income of $300,000. The difference resulted from $60,000 of nondeductible premiums on Ajax's officers' life insurance and $40,000 of rental income received in advance. Rental income is taxable when received. Ajax's effective tax rate is 30%. In its Year 2 income statement, what amount should Ajax report as income tax expense-current portion?(Points : 5)

$90,000$102,000$108,000$120,000

Question 5.5.(TCO B) Stone Co. began operations in Year 1 and reported $225,000 in income before income taxes for the year. Stone's Year 1 tax depreciation exceeded its book depreciation by $25,000. Stone also had nondeductible book expenses of $10,000 related to permanent differences. Stone's tax rate for Year 1 was 40%, and the enacted rate for years after Year 1 is 35%. In its December 31, Year 1, balance sheet, what amount of deferred income tax liability should Stone report?(Points : 5)

$8,750$10,000$12,250$14,000