I need help with part B The following information has been obtained for Sheridan Corporation.1.Prior to 2020, taxable income and pretax financial income were identical.2.Pretax financial income is $1,634,000 in 2020 and $1,359,000 in 2021.On January 1, 2020, equipment costing $1,260,000 is purchased. It is to be depreciated on a straight-line basis over 5 yearsfor tax purposes and over 8 years for financial reporting purposes. (Hint: Use the half-year convention for tax purposes, asdiscussed in Appendix 11A.)3.4.Interest of $57,000 was earned on tax-exempt municipal obligations in 2021.5.Included in 2021 pretax financial income is a gain on discontinued operations of $195,000, which is fully taxable.6.The tax rate is 20% for all periods.7.Taxable income is expected in all future years.(a)Your answer is correct.Compute taxable income and income taxes payable for 2021.Taxable income$1207500%24 (b)Prepare the journal entry to record 2021 income tax expense, income taxes payable, and deferred taxes. (Credit account titles areautomatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles andenter O for the amounts.)Account Titles and ExplanationDebitCredit

Solution:- Given, Financial Income = $1,634,000 in 2020 and $1,359,000 in 2021. Purchase Equipment =…

(b) Prepare the journal entry to record 2021 income tax expense, income taxes payable, and deferred taxes. (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 O for the amounts.) Account Titles and Explanation Debit Credit

(b) Prepare the journal entry to record 2021 income tax expense, income taxes payable, and deferred taxes. (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 O 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

Problem 1Q

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