Accounting for Income Taxes Dunkin, Inc. reported revenues of $150,000 and expenses of $70,000 in each of its first three years of operations. For tax purposes, Dunkin reported the same expenses to the IRS in each of the years. Dunkin reported taxable revenues of $120,000 in 2020, $160,000 in 2021, and $170,000 in 2022. What is the effect on the accounts of reporting different amounts of revenue for GAAP versus tax?

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Deferred Tax Liability 2020
2020
2021
2022
Total
Comparison of Differences
Income tax expense (GAAP)
Income tax payable (IRS)
Difference
Dunkin makes the following entry at the end of 2020 to record
income taxes.
General Journal
Debit
Credit
Date
LO 1
Copyright ©2019 John Wiley & Sons, Inc.
스 Notes
ENG
INTL
Transcribed Image Text:Shawn Smith P Search (Alt+Q) Record Review View Help Slīde Show Deferred Tax Liability 2020 2020 2021 2022 Total Comparison of Differences Income tax expense (GAAP) Income tax payable (IRS) Difference Dunkin makes the following entry at the end of 2020 to record income taxes. General Journal Debit Credit Date LO 1 Copyright ©2019 John Wiley & Sons, Inc. 스 Notes ENG INTL
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Accounting for Income Taxes
Dunkin, Inc. reported revenues of $150,000 and expenses of
$70,000 in each of its first three years of operations. For tax
purposes, Dunkin reported the same expenses to the IRS in
each of the years. Dunkin reported taxable revenues of
$120,000 in 2020, $160,000 in 2021, and $170,000 in 2022.
What is the effect on the accounts of reporting different
amounts of revenue for GAAP versus tax?
ENotes
88
ENG
C
F5
F6
F7
PrtSc
De
F8
F9
F10
F11
F12
Ins
Transcribed Image Text:p Search (Alt+Q) Shawn Smith 55 imations Slīde Show Record Review View Help ORe Accounting for Income Taxes Dunkin, Inc. reported revenues of $150,000 and expenses of $70,000 in each of its first three years of operations. For tax purposes, Dunkin reported the same expenses to the IRS in each of the years. Dunkin reported taxable revenues of $120,000 in 2020, $160,000 in 2021, and $170,000 in 2022. What is the effect on the accounts of reporting different amounts of revenue for GAAP versus tax? ENotes 88 ENG C F5 F6 F7 PrtSc De F8 F9 F10 F11 F12 Ins
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