(1) Prepare the general journal entries, in proper form, to record all informati

Question

(1) Prepare the general journal entries, in proper form, to record all information related to income taxes for all three years. assuming that the enacted tax rate applicable to all three years is 30%. Omit explanations.

(2) Prepare the general journal entries, in proper form, to record all information related to income taxes for all three years, assuming that the enacted tax rates are as follows: 20X6 is 30%; 20X7, 35%; and 20X8, 39%. Omit explanations.

Aucilla Company purchased equipment for $180,000 on January 2, 20X6, its first day of operations. For book purposes, the equipment will be depreciated using the straight line method over three years with no salvage value. Pretax financial income and taxable income are as follows. 20X6 20X7 20X8 224,000 S 200,000 Pretax financial income 300,000 260,000 260,000 Taxable income 324,000 The temporary difference between pretax financial income and taxable income is due to the use of accelerated depreciation for tax purposes.

Explanation / Answer

(1)

(2)

*Future taxable amount $24,000
Deferred tax @ 30% 7,200
Deferred tax @ 35% 8,400
Adjustment $1,200

20X6 20X7 20X8 TOTAL BOOK DEPRICIATION $60,000 $60,000 $60,000 $180,000 TAX DEPRICIATION $84,000 $60,000 $36,000 $180,000 TEMPORARY DIFFERENCE $(24,000) $0 $24,000

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