Question 3 Oxford Corporation began operations in 2014 and reported pretax finan

Question

Question 3

Oxford Corporation began operations in 2014 and reported pretax financial income of $260,170 for the year. Oxford's tax depreciation exceeded its book depreciation by $35,940. Oxford's tax rate for 2014 and years thereafter is 30%. Assume this is the only difference between Oxford's pretax financial income and taxable income. prepare the journal entry to record the income tax expense, deferred income taxes payable. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)

Explanation / Answer

Amount (in $) Particulars Debit Credit Income Tax Expense 78051.00       Income Tax Payable 67269.00       Deferred Tax Liability 10782.00 Deferred Tax Liability should be classified as a Long Term Liability on the 31.12.2014 balance sheet.

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