At the end of 2019, Lucretia McEvil Company has $180,000 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2020 $ 60,000 2021 50,000 2022 40,000 2023 0030,000 $180,000 Tax rates enacted as of the beginning of 2018 are: 2018 and 2019 40% 2020 and 2021 30% 2022 and later 25% McEvil's taxable income for 2019 is $320,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there were no deferred taxes at the end of 2018. b. Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $22,000 in a Deferred Tax Liability account at the end of 2018.
At the end of 2019, Lucretia McEvil Company has $180,000 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2020 $ 60,000 2021 50,000 2022 40,000 2023 0030,000 $180,000 Tax rates enacted as of the beginning of 2018 are: 2018 and 2019 40% 2020 and 2021 30% 2022 and later 25% McEvil's taxable income for 2019 is $320,000. Taxable income is expected in all future years. Instructions a. Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there were no deferred taxes at the end of 2018. b. Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $22,000 in a Deferred Tax Liability account at the end of 2018.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
At the end of 2019, Lucretia McEvil Company has $180,000 of cumulative temporary differences that will result in reporting the following future taxable amounts.
| 2020 |
$ 60,000
|
| 2021 |
50,000
|
| 2022 |
40,000
|
| 2023 |
0030,000
|
|
$180,000
|
Tax rates enacted as of the beginning of 2018 are:
| 2018 and 2019 |
40%
|
| 2020 and 2021 |
30%
|
| 2022 and later |
25%
|
McEvil's taxable income for 2019 is $320,000. Taxable income is expected in all future years.
Instructions
a. Prepare the
b. Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $22,000 in a
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