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Exercise 19-4
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Show List of Accounts
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Account Titles and Explanation
Debit
Credit
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Zurich Company
Income Statement (Partial)
Year ended December 31, 2014
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Exercise 19-4
Zurich Company reports pretax financial income of $84,270 for 2014. The following items cause taxable income to be different than pretax financial income.1. Depreciation on the tax return is greater than depreciation on the income statement by $20,240. 2. Rent collected on the tax return is greater than rent earned on the income statement by $24,840. 3. Fines for pollution appear as an expense of $13,940 on the income statement.
Zurich’s tax rate is 40% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2014.
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Explanation / Answer
Compute taxable income and income taxes payable for 2014
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Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014
Prepare the income tax expense section of the income statement for 2014, beginning with the line “Income before income taxes.
Taxable Income 102810 Income tax payble 41124Related Questions
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