Question

Cliff Corp (CC) reported on its financial statements deferred taxes of $250, $300 and $220 in 2017, 2018 and 2019, respectively. If CC reported income tax expense of $100 for in 2018 and 2019, then income tax did CC actually pay in 2018 and 2019?

Answer 1

	2017	2018	2019
Deferred taxes	$              250	$           300	$           220
Income tax expense		$           100	$           100
Increase in deferred taxes		$             50
Decrease in deferred taxes			$ 80
Tax paid:
2018 = 100-50 =		$             50
2019 = 100+80 =			$           180