PLEASE HELP ASAP. WILL RATE. E19-5 (L01,2) (Two Temporary Differences, One Rate,

Question

PLEASE HELP ASAP. WILL RATE.

E19-5 (L01,2) (Two Temporary Differences, One Rate, Beginning Deferred Taxes) The following facts relate to Krung Thep Corporation. Deferred tax liability, January 1, 2017, $40,000. 2. 1. Deferred tax asset, January 1,2017, so. 3. Taxable income for 2017, $95,000. 4. Pretax financial income for 2017,$200,000 Cumulative temporary difference at December 31, 2017,giving rise to future taxable amounts, $240,000. 6. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $35,000. 7. Tax rate for all years, 40%. 8. The company is expected to operate profitably in the future. Instructions ) Compute income taxes payable for 2017. (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017. (c) Prepare the income tax expense section of the income statement for 2017, beginning with the line "Income before income taxes.

Explanation / Answer

a) Income taxes payable for 2017 = taxable income for 2017*tax rate for 2017 = 95000*0.40 = 38,000

b) Journal:

Working Notes:

WN-1: Deffered tax liability

WN-2: Deffered tax Asset

c)

Income tax expense    203,000.00 Deferred tax Asset      35,000.00        Income tax payable      38,000.00        Deferred tax liability    200,000.00

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