Exercise 19-5 The following facts relate to Bonita Corporation 1. Deferred tax l

Question

Exercise 19-5 The following facts relate to Bonita Corporation 1. Deferred tax liability, January 1, 2017, $46,800. 2. Deferred tax asset, January 1, 2017, $0. 3. Taxable income for 2017, $111,150. 4. Pretax financial income for 2017, $234,000. 5. Cumulative temporary difference at December 31, 2017, giving rise to future taxable amounts,$280,800. 6. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $40,950. 7, Tax rate for all years, 40%. 8. The company is expected to operate profitably in the future. Compute income taxes payable for 2017. (Round answer to the nearest dollar amount,e.g. $1,525.) Income taxes payable s SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT

Explanation / Answer

SOLUTION

(A) Income taxes payable for 2017-

(B) Journal Entry-

Amount ($) Taxable income 111,150 Enacted tax rate 40% Income tax payable 44,460

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