BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281

Solutions

Chapter
Section
BuyFindarrow_forward

Intermediate Accounting: Reporting...

3rd Edition
James M. Wahlen + 2 others
ISBN: 9781337788281
Textbook Problem
5 views

Future Taxable Amount Arrow Company began operations at the beginning of 2019, At the end of 2019, Arrow reported taxable income of $20,800 and pretax financial income of $22,200 because of a single temporary difference. The income tax rate for the current year is 30%, but Congress has enacted a 40% tax rate for 2020 and beyond.

Required:

Prepare Arrow’s income tax journal entry at the end of 2019.

To determine

Prepare journal to record the entry for income tax of Company A at the end of 2019.

Explanation

Income Tax Expenses: The expenses which are related to the taxable income of the individuals and business entities for an accounting period, and are recognized by them for the purpose of federal government and state government tax are called as income tax expenses.

Prepare journal to record the entry for income tax of Company A at the end of 2019:

DateAccount title and ExplanationPost ref. Amount
DebitCredit
2019    
December 31 Income tax expense $6,800 
     Income tax payable (1)  $6,240
  Deferred tax liability (2)  $560
 (To record the income tax payable )   

Table (2)

  • Income tax expense is an expense that decreases the stockholder’s equity and it is increased. Thus, it is debited.
  • Accounts Payable is a liability and it is increased...

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What happens when a firm makes a decision to grow from within?

Foundations of Business (MindTap Course List)

RETURN ON EQUITY AND QUICK RATIO Lloyd Inc. has sales of 200,000, a net income of 15,000, and the following bal...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)