At the end of 2019, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and $33,000 for income tax purposes. Slater earned taxable income of $97,000 during 2019. 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 tax journal entry at the end of 2019. 2. Show how the deferred taxes would be reported on Slater’s December 31, 2019, balance sheet.
At the end of 2019, its first year of operations, Slater Company reported a book value for its depreciable assets of $40,000 for financial reporting purposes and $33,000 for income tax purposes. Slater earned taxable income of $97,000 during 2019. 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 tax journal entry at the end of 2019. 2. Show how the deferred taxes would be reported on Slater’s December 31, 2019, balance sheet.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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E18-3 Temporary Difference At the end of 2019, its first year of operations, Slater Company reported a book value for its
Required:
1. Prepare Slater’s income tax
2. Show how the
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