Question

Brady's listing of deferred tax assets and liabilities includes the following for operations in the tax jurisdictions of Tambura and Nileboo:
Tambura:
Deferred tax asset of $19 million
Valuation allowance of $16 million
Deferred tax liability of $28 million
Nileboo:
Deferred tax asset of $60 million
Deferred tax liability of $17 million
Brady files separate tax returns in Tambura and Nileboo. Brady’s balance sheet would include the following disclosure of deferred tax assets and liabilities:_______.

Answer 1

Answer: Deferred tax liability of $25 million in Tambura and Deferred tax asset of $43 million in Nileboo.

Explanation:

Tambura

Deferred tax asset                                         $ 19 million

Less: Valuation allowance                           (  $ 16 million)

Net deferred tax asset                                  $ 3 million

Less Deferred tax liability                            ($ 28 million)

Deferred tax liability                                      $25 million

Nileboo

Deferred tax asset                                         $ 60 million

Less: Deferred tax liability                           (  $ 17 million)

Deferred tax asset                                         $43 million