Brogan, Inc., reports bad debt expense using the allowance method. For tax purpo

Question

Brogan, Inc., reports bad debt expense using the allowance   method. For tax purposes the direct write-off method is used. At the end of   the current year, Brogan has accounts receivable and an allowance for   uncollectible accounts of $4,000,000 and $300,000, respectively, and taxable   income of $22,000,000. At the end of the previous year, Pocus reported a   deferred tax asset of $90,000 related to the difference in reporting bad   debts, its only temporary difference. The enacted tax rate is 35% each year.
Prepare the appropriate journal entry for Brogan to record the   income tax provision for the current year. Show well-labeled supporting   computations. Brogan, Inc., reports bad debt expense using the allowance   method. For tax purposes the direct write-off method is used. At the end of   the current year, Brogan has accounts receivable and an allowance for   uncollectible accounts of $4,000,000 and $300,000, respectively, and taxable   income of $22,000,000. At the end of the previous year, Pocus reported a   deferred tax asset of $90,000 related to the difference in reporting bad   debts, its only temporary difference. The enacted tax rate is 35% each year.
Prepare the appropriate journal entry for Brogan to record the   income tax provision for the current year. Show well-labeled supporting   computations.

Explanation / Answer

22,000,000 x .35 = 7700000

Income Tax Expense above answer dr
Income tax Payable above answer cr

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