The following information is available for Splish Corporation for 2016 (its firs

Question

The following information is available for Splish Corporation for 2016 (its first year of operations).

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

1. Excess of tax depreciation over book depreciation, $41,000. This $41,000 difference will reverse equally over the years 2017–2020. 2. Deferral, for book purposes, of $20,800 of rent received in advance. The rent will be recognized in 2017. 3. Pretax financial income, $328,000. 4. Tax rate for all years, 40%.

Explanation / Answer

Taxable income for 2016 $307800

journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016

journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming taxable income of $329,500

working pre tax financial income for 2016 $328000 excess tax depriciation over book depriciation ($41000) Rent received in advance $20800 taxable income $307800

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