At the end of 2019, Vaughn Company has $181,600 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2020 $60,500 2021 50,200 2022 41,700 2023 29,200 $181,600 Tax rates enacted as of the beginning of 2018 are: 2018 and 2019 40 % 2020 and 2021 30 % 2022 and later 25 % Vaughn’s taxable income for 2019 is $329,300. Taxable income is expected in all future years. (a) Prepare the journal entry for Vaughn 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. (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 Vaughn to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $22,300 in a Deferred Tax Liability account at the end of 2018. (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

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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At the end of 2019, Vaughn Company has $181,600 of cumulative temporary differences that will result in reporting the following future taxable amounts.

2020		$60,500
2021		50,200
2022		41,700
2023		29,200
		$181,600

Tax rates enacted as of the beginning of 2018 are:

2018 and 2019	40	%
2020 and 2021	30	%
2022 and later	25	%

Vaughn’s taxable income for 2019 is $329,300. Taxable income is expected in all future years.

(a) Prepare the journal entry for Vaughn 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. (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 Vaughn to record income taxes payable, deferred income taxes, and income tax expense for 2019, assuming that there was a balance of $22,300 in a Deferred Tax Liability account at the end of 2018. (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

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