A company has a temporary differencedue to depreciation. For fiscal year 2012,its Income Tax Expense is $15,000 and itsTaxable Income is $10,000. The statutory taxrate is 35%What is the correct journal entry forrecording 2012 Income Tax Expense andIncome Tax Payable?Dr. Income Tax Expense15,000Cr. Deferred Tax Liabilities11,500Cr. Income Tax Payable3,500Dr. Income Tax Expense15,000Dr. Deferred Tax Assets85,000 Cr. Income Tax Payable100,000Dr. Income Tax Expense15,000Cr. Income Tax Payable15,000Dr. Income Tax Expense15,000Dr. Deferred Tax Liabilities85,000Cr. Income Tax Payable100,000Dr. Income Tax Expense15,000Cr. Deferred Tax Assets11,500Cr. Income Tax Payable3,500AdjustDraw

Solution: Correct Journal entry is as under: Account title Debit Credit Income tax expense…

A company has a temporary difference due to depreciation. For fiscal year 2012, its Income Tax Expense is $15,000 and its Taxable Income is $10,000. The statutory tax rate is 35% What is the correct journal entry for recording 2012 Income Tax Expense and Income Tax Payable?

A company has a temporary difference due to depreciation. For fiscal year 2012, its Income Tax Expense is $15,000 and its Taxable Income is $10,000. The statutory tax rate is 35% What is the correct journal entry for recording 2012 Income Tax Expense and Income Tax Payable?

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter3: Taxes On The Financial Statements

Section: Chapter Questions

Problem 4BCRQ

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Question

A company has a temporary difference
due to depreciation. For fiscal year 2012,
its Income Tax Expense is $15,000 and its
Taxable Income is $10,000. The statutory tax
rate is 35%
What is the correct journal entry for
recording 2012 Income Tax Expense and
Income Tax Payable?
Dr. Income Tax Expense
15,000
Cr. Deferred Tax Liabilities
11,500
Cr. Income Tax Payable
3,500
Dr. Income Tax Expense
15,000
Dr. Deferred Tax Assets
85,000

Cr. Income Tax Payable
100,000
Dr. Income Tax Expense
15,000
Cr. Income Tax Payable
15,000
Dr. Income Tax Expense
15,000
Dr. Deferred Tax Liabilities
85,000
Cr. Income Tax Payable
100,000
Dr. Income Tax Expense
15,000
Cr. Deferred Tax Assets
11,500
Cr. Income Tax Payable
3,500
Adjust
Draw

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