The following information is available for Pronghorn plc for 2022. 1. Excess of tax depreciation over book depreciation, £38,400. This £38,400 difference will reverse equally over the years 2023-2026. Deferral, for book purposes, of £20,800 of rent received in advance. The rent will be recorded as revenue in 2023. Pretax financial income, £284,000. There are no deferred taxes at the beginning of 2022. Tax rate for all years, 40%. 2. 3. 4. (a) Your Answer Correct Answer (Used) Compute taxable income for 2022. Taxable income £ 266,400

SWFT Comprehensive Volume 2019
42nd Edition
ISBN:9780357233306
Author:Maloney
Publisher:Maloney
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 47P
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subject-Accounting

The following information is available for Pronghorn plc for 2022.
1.
2.
3.
4.
(a)
Excess of tax depreciation over book depreciation, £38,400. This £38,400 difference will reverse equally over the years
2023-2026.
Deferral, for book purposes, of £20,800 of rent received in advance. The rent will be recorded as revenue in 2023.
Pretax financial income, £284,000. There are no deferred taxes at the beginning of 2022.
Tax rate for all years, 40%.
Your Answer
Correct Answer (Used)
Compute taxable income for 2022.
Taxable income £
266,400
Transcribed Image Text:The following information is available for Pronghorn plc for 2022. 1. 2. 3. 4. (a) Excess of tax depreciation over book depreciation, £38,400. This £38,400 difference will reverse equally over the years 2023-2026. Deferral, for book purposes, of £20,800 of rent received in advance. The rent will be recorded as revenue in 2023. Pretax financial income, £284,000. There are no deferred taxes at the beginning of 2022. Tax rate for all years, 40%. Your Answer Correct Answer (Used) Compute taxable income for 2022. Taxable income £ 266,400
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. (Credit
account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select
"No Entry" for the account titles and enter 0 for the amounts.)
Account Titles and Explanation
Income Tax Expense
Deferred Tax Asset
Income Taxes Payable
Deferred Tax Liability I
Debit
Credit
11
10
Transcribed Image Text:Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Taxes Payable Deferred Tax Liability I Debit Credit 11 10
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