The following are two independent situations related to future taxable and deductible amounts that..

The following are two independent situations related to future taxable and deductible amounts that resulted from temporary differences at December 31, 2017. In both situations, the future taxable amounts relate to property, plant, and equipment depreciation, and the future deductible amounts relate to settlements of litigation that were previously accrued in the accounts. 1. Alia Corp. has developed the following schedule of future taxable and deductible amounts: Alia reported a net deferred tax liability of $1,000 at January 1, 2017. 2. Khoi Corp. has the following schedule of future taxable and deductible amounts: Khoi Corp. reported a net deferred tax asset of $1,200 at January 1, 2017. Both Alia Corp. and Khoi Corp. have taxable income of $8,000 in 2017 and expect to have taxable income in all future years. The tax rates enacted as of the beginning of 2017 are 25% for 2017 to 2020, and 30% for 2021 and subsequent years. All of the underlying temporary differences relate to non-current assets and liabilities. Both Khoi and Alia report under IFRS. Instructions (a) Determine the deferred tax assets or liabilities that will be reported on each company s December 31, 2017 statement of financial position. (b) For each of these two situations, prepare journal entries to record income taxes for 2017. Show all calculations. (c) Provide the presentation of deferred tax accounts on each company s December 31, 2017 statement of financial position, including their co

 

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