-SI. Cengage Module 4 Assignment 1. Ex.18-03 2. Ex. 18-05 3. Ex. 18-12 4. Pr. 18
ID: 2599320 • Letter: #
Question
-SI. Cengage Module 4 Assignment 1. Ex.18-03 2. Ex. 18-05 3. Ex. 18-12 4. Pr. 18-01 5. Pr.18-14. Algo (- v2.cengagenow.com/ilm takeAssignment/takeAssignmentMain.do? eBook Show Me How Calculator Temporary Difference Chart of Accounts General Journal Labels Balance Instructions At the end of 2016, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and S3 3,000 for income tax purposes. Slater earned taxable income of$97,000 during 2016. The company is subject to a 30% income tax rate, and no change has been enacted for future years. The depreciation was the only temporary difference between taxable income and pretax financial income. Required: 1. Prepare Slater's income tox journal entry ot the end of 2016. 2. Show how the deferred taxes would be reported on Slater's December 31, 2016, balance sheet. Check My Work Next Progress: 115 Items O Type here to search De', w P0 @ ^41 12/16/2017 3:31 PMExplanation / Answer
1.
Taxable income = $97,000
Excess of depreciation for tax purposes over depreciation for financial reporting purposes
= $40,000 - $33,000
= $7,000
Therefore,
Income for financial purposes = Taxable income + Excess depreciation = $97,000 + $7,000 = $104,000
Income tax journal entry will be prepared as follows:
2.
The deferred tax liability will be reported in the balance sheet as follows:
Date Account Titles Post Ref. Debit Credit Dec. 31, 2016 Income tax expense ($104,000 x 30%) 31200 Deferred tax liability ($7,000 x 30%) 2100 Income tax payable ($97,000 x 30%) 29100Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.