Question Completion:
Times-Roman Publishing Company reports the following amounts in its first three years of operation: ($ in 000s) Pretax accounting income Taxable income 2018 2019 2020 S340 $320 $310 380 330 350 
Required: 
1. What is the balance sheet account for which a temporary difference is created by this situation? 
2. For each year, indicate the cumulative amount of the temporary difference at year-end. (Enter your answers in thousands.) 
3. Determine the balance in the related deferred tax account at the end of each year. Is it a deferred tax asset or a deferred tax liability? (Enter your answers in thousands.)
Answer:
Times-Roman Publishing Company
1. The balance sheet account for which a temporary difference is created by this situation is the Deferred Subscription Revenue.
2. Cumulative amount of the temporary difference at year-end:
December 31, ($ in 000s)               2018    2019    2020
Cumulative Temporary Difference $40      $50     $90
3. The balance in the related deferred tax account for each year:
December 31, ($ in 000s)               2018    2019    2020
Deferred Tax Asset (Liability)          $10      $2.5     $10
They are all deferred tax assets.
Explanation:
a) Data and Calculations:
December 31, ($ in 000s)               2018    2019    2020
Pretax accounting income             $340    $320    $310
Taxable income                                380      330      350
Temporary Difference                     $40       $10     $40
Cumulative Temporary Difference $40      $50     $90
Deferred Tax Asset (Liability)          $10      $2.5     $10
a) A deferred tax asset arises from the overpayment or advance payment of taxes as a result of the temporary differences between the accounting income and the taxable income.  On the other hand, a deferred tax liability arises from the underpayment of taxes as a result of the temporary differences between accounting income and taxable income.