Brief Exercise 16-2 Temporary difference; determine taxable income; determine pr

Question

Brief Exercise 16-2 Temporary difference; determine taxable income; determine prior year deferred tax amount (LO16-1) Kara Fashions uses straight-line depreciation for financial statement reporting and MACRS for income tax reporting. Three years after ts purchase, one of Kara's buildings has a book value of $400,000 and a tax basis of $300,000. There were no other temporary differences and no permanent deerences. Taxable income was $4 million and Kara's tax rate is 40% What is the deferred tax lability to be reported in the balance sheet? Assuming that the deferred tax liability balance was $32,000 the previous year, prepare the appropriate journal entry to record income taxes this year Complete this question by entering your answers in the tabs below. Balance Shet General what is the deferred tax Sablity to be reported in the belance sheet? (Enter your answer in whole dollars C Prev2of 4 Next > 20 3 5 8

Explanation / Answer

Deferred tax Liability 40000 (100000*.4) Event General Journal Debit Credit 1 Income tax Expense 1600000 (4000000*.4) Deferred tax liability 8000 Income tax payable 1592000 (To record income tax expense)

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.