Exercise 19-11 At the end of 2016, Riverbed Company has $180,000 of cumulative t

Question

Exercise 19-11

At the end of 2016, Riverbed Company has $180,000 of cumulative temporary differences that will result in reporting the following future taxable amounts.

$60,900

48,900

38,700

31,500

$180,000

Tax rates enacted as of the beginning of 2015 are:

Riverbed’s taxable income for 2016 is $333,000. Taxable income is expected in all future years.

(a) Prepare the journal entry for Riverbed to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there were no deferred taxes at the end of 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

(b) Prepare the journal entry for Riverbed to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there was a balance of $22,500 in a Deferred Tax Liability account at the end of 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

Open Show Work

2017

$60,900

2018

48,900

2019

38,700

2020

31,500

$180,000

Explanation / Answer

a) Assuming there were no deferred tax at end of 2015 :-

Journal Entry :-

Working Note :-

b) Deferred Tax Expenses :-

Journal Entry :-

Particulars Amount($) Deferred Tax Liability at end of 2016 (Working Note) 50490 Less : Deferred Tax Liability at end of 2015 0 Deferred Tax Expenses 50490

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