1 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
in 2025 sunland corporation had pretax financial income of 176,000 and taxable income of
131,000. the difference is due to the use of different depreciation methods for tax and accounting
purposes. the effective tax rate is 20%. compute the amount to be reported as income taxes
payable at december 31, 2025 .
. ANSWER..26,200
131,000 * .2 (the taxable income and then the tax rate)
shamrock corporation began operations in 2025 and reported pretax financial income of 234,000
for the yr. Shamrocks tax depreciation exceeded its book depreciation by 32,000. Shamrocks tax
rate for 2025 and thereafter is 40%. In its December 31, 2025 balance sheet, what amount of
deferred tax liability should be reported? .
. ANSWER..12,800
32,000*.4
(32,000 is the liability because it is the amount that the tax and book depreciations were
different by and then you tax that amount by the rate)
deferred tax liability and assets are both: .
. ANSWER..concurrent
shamrock corporation began operations in 2025 and reported pretax financial income of 236,000
for the yr. Shamrocks tax depreciation exceeded its book depreciation by 32,000. Shamrocks tax
rate for 2025 and thereafter is 40%. what are the journal entries for income tax expense deferred
taxes, and income taxes payable? .
. ANSWER..dr: income tax expense 94,400 (236,000*.4)
cr: deferred tax liability 12,800 (32,000*.4)
cr: income taxes payable 81,600 (94,400-12,800)
At december 2025 teal corporation had a deferred tax liability of 26,800. at december 2026 the
deferred tax liability is 42,800. the corporations 2026 current tax expense is 49,300. what amount
should be reported as total 2026 income tax expense?
.. ANSWER..65,300
(difference between 2025 and 2026 tax liability --> 42,800-26,800= 16,000. then add the 16,000 to
the current tax expense of 49,300)
,2 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
at december 2025 sheffield corp had an estimated warranty liability of 126,000 for accounting
purposes and 0 for tax purposes. the effective tax rate is 20%. what is the deferred tax asset at
december 2025?
.. ANSWER..25,200
(126,000*.2)
at december 2025 larkspur inc. had a deferred tax asset of 28,900. At december 2026 the deferred
tax asset is 60,500. the corporations 2026 current tax expense is 65,200. what is larkspurs total
income tax expense for 2026? .
. ANSWER..33,600
(60,500-28,900=31,600. then do 65,200-31,600. the difference in the deferred tax asset is the
amount of the deferred tax that will carry forward and therefore should not be included in
current income tax expense so it is deducted from the current tax expense)
prepare the journal entry: at december 2025 crane corp has a deferred tax asset of 184,000. After
careful review of all available evidence, it is determined that is is more likely than not that
55,200 of this deferred tax asset will not be realized.
.. ANSWER..dr: income tax expense 55,200
cr: allowance to reduce deferred tax assets to expected realizable value 55,200
(this is the entry to recognize the alteration)
Marigold inc had pretax financial income of 144,700 in 2025. included in the computation of that
amount is insurance expense of 3,700 which is not deductible for tax purposes. In addition,
depreciation for tax purposes exceeds accounting depreciation by 10,800. what are the journal
entries to record 2025 taxes with a tax rate of 25%?
.. ANSWER..dr: income tax expense 37,100
((144,700+3,700)*.25)
cr: deferred tax liability 2,700 (10,800*.25)
cr: income tax payable 34,400 (37,100-2,700)
marigold corp has a cumulative temporary difference related to depreciation of 556,000 at
december 2025. This difference will reverse as follows:
,3 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
2026; 39,000 17% tax rate
2027; 226,000 17% tax rate
2028; 291,000 20% tax rate
compute the amount marigold should report as a deferred tax liability december 2025 ..
ANSWER..103,250
((39,000*.17)+(226,000*.17)+(291,000*.2))
at december 2025 bramble corp had a deferred tax liability of 457,600, resulting from future
taxable amounts of 2,080,000 and an enacted tax rate of 22%. In may 2026 a new income tax act
is signed into law that rises the tax rate to 25% for 2026 and future years. what is the journal
entry to adjust the deferred tax liability?
.. ANSWER..dr: income tax expense 62,400
cr: deferred tax liability 62,400
(take the future taxable amount of 2,080,000 and multiply that by the new tax rate of 25% then
subtract the tax liability that resulted from 2,080,000*.22 (457,600))
marigold inc incurred a net operating loss of 513,000 in 2025. the tax rate for all years is 20%.
prepare the journal entries to record the benefits of the loss carry forward. Marigold expects to
return to profitability in 2026.
.. ANSWER..dr: deferred tax asset 102,600
cr: income tax expense 102,600
(the net operating loss times the tax rate to determine the tax that can be carried forward.
513,000*.2)
oriole inc incurred a net operating loss of 455,000 in 2025. the tax rate for all years is 30%.
assume that it is more likely than not that the entire net operating loss carry forward will not be
realized in future years. prepare the journal entries to:
-record the carry forward
-record allowances
.. ANSWER..dr: deferred tax asset 136,500
cr: income tax expense 136,500
dr: income tax expense 136,500
, 4 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
cr: allowance to reduce deferred tax assets to expected realizable value 136,500
(455,000*.3)
in 2026 metlock corp suffered a net operating loss of 412,800 which is elected to carry back the
enacted tax rate in 2026 is 29% but in 2024 and 2025 is 30%. what are the journal entries to
record the effect of the carry back .
. ANSWER..dr: income tax refund receivable 123,840
cr: income tax expense 123,840
(412,800*.3 because you are carrying that amount back to the tax rate of previous years)
sky song inc. incurred a net operating loss of 460,000 in 2025. combined income for 2023 and
2024 was 322,000. the tax rate for all years is 20%. sky song elects the carry back option. prepare
the journal entries to record the benefits of the loss carryback and the loss carry forwards. ..
ANSWER..for the loss carryback:
dr: income tax refund receivable 64,400
cr: income tax expense 64,400
(322,000*.2)
for the loss carryforward
dr: deferred tax asset 27,600
cr: income tax expense 27,600
((460,000*.2)-64,400)
is pretax financial income determined by the internal revenue code .
. ANSWER..no, it is determined according to GAAP
is a deferred tax liability the deferred tax consequence attributable to taxable temporary
differences? .
. ANSWER..yes, a deferred tax liability represents the increase in taxes payable in future
years as a result of taxable temporary differences existing at the end of the current year
future deductible amounts will cause:
a. the recording of a deferred tax liability
b. a decrease in pretax financial income in future years
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
in 2025 sunland corporation had pretax financial income of 176,000 and taxable income of
131,000. the difference is due to the use of different depreciation methods for tax and accounting
purposes. the effective tax rate is 20%. compute the amount to be reported as income taxes
payable at december 31, 2025 .
. ANSWER..26,200
131,000 * .2 (the taxable income and then the tax rate)
shamrock corporation began operations in 2025 and reported pretax financial income of 234,000
for the yr. Shamrocks tax depreciation exceeded its book depreciation by 32,000. Shamrocks tax
rate for 2025 and thereafter is 40%. In its December 31, 2025 balance sheet, what amount of
deferred tax liability should be reported? .
. ANSWER..12,800
32,000*.4
(32,000 is the liability because it is the amount that the tax and book depreciations were
different by and then you tax that amount by the rate)
deferred tax liability and assets are both: .
. ANSWER..concurrent
shamrock corporation began operations in 2025 and reported pretax financial income of 236,000
for the yr. Shamrocks tax depreciation exceeded its book depreciation by 32,000. Shamrocks tax
rate for 2025 and thereafter is 40%. what are the journal entries for income tax expense deferred
taxes, and income taxes payable? .
. ANSWER..dr: income tax expense 94,400 (236,000*.4)
cr: deferred tax liability 12,800 (32,000*.4)
cr: income taxes payable 81,600 (94,400-12,800)
At december 2025 teal corporation had a deferred tax liability of 26,800. at december 2026 the
deferred tax liability is 42,800. the corporations 2026 current tax expense is 49,300. what amount
should be reported as total 2026 income tax expense?
.. ANSWER..65,300
(difference between 2025 and 2026 tax liability --> 42,800-26,800= 16,000. then add the 16,000 to
the current tax expense of 49,300)
,2 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
at december 2025 sheffield corp had an estimated warranty liability of 126,000 for accounting
purposes and 0 for tax purposes. the effective tax rate is 20%. what is the deferred tax asset at
december 2025?
.. ANSWER..25,200
(126,000*.2)
at december 2025 larkspur inc. had a deferred tax asset of 28,900. At december 2026 the deferred
tax asset is 60,500. the corporations 2026 current tax expense is 65,200. what is larkspurs total
income tax expense for 2026? .
. ANSWER..33,600
(60,500-28,900=31,600. then do 65,200-31,600. the difference in the deferred tax asset is the
amount of the deferred tax that will carry forward and therefore should not be included in
current income tax expense so it is deducted from the current tax expense)
prepare the journal entry: at december 2025 crane corp has a deferred tax asset of 184,000. After
careful review of all available evidence, it is determined that is is more likely than not that
55,200 of this deferred tax asset will not be realized.
.. ANSWER..dr: income tax expense 55,200
cr: allowance to reduce deferred tax assets to expected realizable value 55,200
(this is the entry to recognize the alteration)
Marigold inc had pretax financial income of 144,700 in 2025. included in the computation of that
amount is insurance expense of 3,700 which is not deductible for tax purposes. In addition,
depreciation for tax purposes exceeds accounting depreciation by 10,800. what are the journal
entries to record 2025 taxes with a tax rate of 25%?
.. ANSWER..dr: income tax expense 37,100
((144,700+3,700)*.25)
cr: deferred tax liability 2,700 (10,800*.25)
cr: income tax payable 34,400 (37,100-2,700)
marigold corp has a cumulative temporary difference related to depreciation of 556,000 at
december 2025. This difference will reverse as follows:
,3 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
2026; 39,000 17% tax rate
2027; 226,000 17% tax rate
2028; 291,000 20% tax rate
compute the amount marigold should report as a deferred tax liability december 2025 ..
ANSWER..103,250
((39,000*.17)+(226,000*.17)+(291,000*.2))
at december 2025 bramble corp had a deferred tax liability of 457,600, resulting from future
taxable amounts of 2,080,000 and an enacted tax rate of 22%. In may 2026 a new income tax act
is signed into law that rises the tax rate to 25% for 2026 and future years. what is the journal
entry to adjust the deferred tax liability?
.. ANSWER..dr: income tax expense 62,400
cr: deferred tax liability 62,400
(take the future taxable amount of 2,080,000 and multiply that by the new tax rate of 25% then
subtract the tax liability that resulted from 2,080,000*.22 (457,600))
marigold inc incurred a net operating loss of 513,000 in 2025. the tax rate for all years is 20%.
prepare the journal entries to record the benefits of the loss carry forward. Marigold expects to
return to profitability in 2026.
.. ANSWER..dr: deferred tax asset 102,600
cr: income tax expense 102,600
(the net operating loss times the tax rate to determine the tax that can be carried forward.
513,000*.2)
oriole inc incurred a net operating loss of 455,000 in 2025. the tax rate for all years is 30%.
assume that it is more likely than not that the entire net operating loss carry forward will not be
realized in future years. prepare the journal entries to:
-record the carry forward
-record allowances
.. ANSWER..dr: deferred tax asset 136,500
cr: income tax expense 136,500
dr: income tax expense 136,500
, 4 WGU D487 SECURE
SW DESIGN EXAM 2024 ACTUAL EXAM 2 VERSIONS
(VERSION A AND B) COMPLETE ACCURATE EXAM
QUESTIONS WITH DETAILED VERIFIED ANSWERS
(100% CORRECT ANSWERS) /ALREADY GRADED A+
cr: allowance to reduce deferred tax assets to expected realizable value 136,500
(455,000*.3)
in 2026 metlock corp suffered a net operating loss of 412,800 which is elected to carry back the
enacted tax rate in 2026 is 29% but in 2024 and 2025 is 30%. what are the journal entries to
record the effect of the carry back .
. ANSWER..dr: income tax refund receivable 123,840
cr: income tax expense 123,840
(412,800*.3 because you are carrying that amount back to the tax rate of previous years)
sky song inc. incurred a net operating loss of 460,000 in 2025. combined income for 2023 and
2024 was 322,000. the tax rate for all years is 20%. sky song elects the carry back option. prepare
the journal entries to record the benefits of the loss carryback and the loss carry forwards. ..
ANSWER..for the loss carryback:
dr: income tax refund receivable 64,400
cr: income tax expense 64,400
(322,000*.2)
for the loss carryforward
dr: deferred tax asset 27,600
cr: income tax expense 27,600
((460,000*.2)-64,400)
is pretax financial income determined by the internal revenue code .
. ANSWER..no, it is determined according to GAAP
is a deferred tax liability the deferred tax consequence attributable to taxable temporary
differences? .
. ANSWER..yes, a deferred tax liability represents the increase in taxes payable in future
years as a result of taxable temporary differences existing at the end of the current year
future deductible amounts will cause:
a. the recording of a deferred tax liability
b. a decrease in pretax financial income in future years
