The following information is available for Wenger Corporation for 2013. Tax rate
ID: 2473335 • Letter: T
Question
The following information is available for Wenger Corporation for 2013.
Tax rate for all years, 30%.
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014, assuming taxable income of $333,500. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
1. Excess of tax depreciation over book depreciation, $44,000. This $44,000 difference will reverse equally over the years 2014–2017. 2. Deferral, for book purposes, of $29,100 of rent received in advance. The rent will be earned in 2014. 3. Pretax financial income, $353,400. .Tax rate for all years, 30%.
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2014, assuming taxable income of $333,500. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Explanation / Answer
Pretax Financial Income $ 353,400 Excess of tax depreciation over book depreciation $ (44,000) Rent received in advance $ 29,100 Taxable Income $ 338,500 Journal Entry Partculars Dr. Cr. Income Tax Expenses (353400*30%) $ 106,020 Deferred Tax Assets(29100*30%) $ 8,730 Income Tax Payable (338500*30%) $ 101,550 Deferred Tax Liability (44000*30%) $ 13,200
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