Accounting for Income Taxes Cullumber Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $50,600 in 2021, $55,500 in 2022, and $60,400 in 2023. Cullumber's pretax financial income for 2020 is $287,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. 1. Compute taxable income and income taxes payable for 2020. 2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

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Chapter1: Financial Statements And Business Decisions
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Cullumber Corporation Example
GAAP Reporting
2020
2021
2022
2023
Financial Income (GAAP)
Temporary Difference
Taxable Income (IRS)
Income tax expense (30%)
Cullumber makes the following entry at the end of 2020 to
record income taxes.
Date
General Journal
Debit
Credit
es
tigate
ENotes
88
即 豆
ENG
12:46 AM
a c))
INTL
4/3/2022
C,
F5
F6
F7
PrtSc
F8
F9
F10
F11
Delete
F12
Ins
&
7
Back
Y
+ II
a
5
Transcribed Image Text:Shawn Smith p Search (Alt+Q) wactic. - O Record Animations Slide Show Record Review View Help ons Cullumber Corporation Example GAAP Reporting 2020 2021 2022 2023 Financial Income (GAAP) Temporary Difference Taxable Income (IRS) Income tax expense (30%) Cullumber makes the following entry at the end of 2020 to record income taxes. Date General Journal Debit Credit es tigate ENotes 88 即 豆 ENG 12:46 AM a c)) INTL 4/3/2022 C, F5 F6 F7 PrtSc F8 F9 F10 F11 Delete F12 Ins & 7 Back Y + II a 5
Shawn Smith ES
P Search (Alt+Q)
O Record
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Accounting for Income Taxes
Cullumber Corporation has one temporary difference at
the end of 2020 that will reverse and cause taxable
amounts of $50,600 in 2021, $55,500 in 2022, and
$60,400 in 2023. Cullumber's pretax financial income for
2020 is $287,000, and the tax rate is 30% for all years.
There are no deferred taxes at the beginning of 2020.
1. Compute taxable income and income taxes payable for 2020.
2. Prepare the journal entry to record income tax expense, deferred income taxes, and
income taxes payable for 2020.
ENotes
69%
ENG
12:46 AM
INTL
4/3/2022
F5
PrtSc
Delete
F6
F7
F8
F9
F10
F11
F12
Ins
&
*
7
Backs
Y
+ II
Transcribed Image Text:Shawn Smith ES P Search (Alt+Q) O Record Slide Show Record Review View Help Animations Accounting for Income Taxes Cullumber Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $50,600 in 2021, $55,500 in 2022, and $60,400 in 2023. Cullumber's pretax financial income for 2020 is $287,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2020. 1. Compute taxable income and income taxes payable for 2020. 2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. ENotes 69% ENG 12:46 AM INTL 4/3/2022 F5 PrtSc Delete F6 F7 F8 F9 F10 F11 F12 Ins & * 7 Backs Y + II
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