Cadbury Co. began operations in 2020. The following data relates to Cadbury ’s 2020 operations: Pretax financial income is $1,000,000. The tax rate is 21%. Cadbury  estimates bad debt expense on 2020 accounts receivable was $35,000. Tax does not deduct the bad debts until an accounts receivable is determined to be uncollectible. Machinery was acquired in January for $500,000. Tax depreciation exceeds GAAP depreciation by 100,000. Interest received on tax-exempt FloridaState bonds was $30,000.     Prepare the journal entry to record income tax payable, income tax expense, and any deferred taxes for 2020.

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A: Income tax: It is the tax levied by the federal government on the income earned by individuals,…

Q: Martin Ltd, in the first year of its operations, reported the following information regarding its…

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A: Journal entry is the primary step to record the transaction in the books of accounts. The income tax…

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A: Solution 1: Net Operating loss carryback Amount Rate of Tax Tax Recorded as Carried back - 2017…

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A: 1.  Formulas first sub part:

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Q: The entry to record the income tax expense would include a

A: Answer:   Credit to income tax payable.

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A: Solution 1: Net Operating loss carryback Amount Rate of Tax Tax Recorded as Carried back - 2017…

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A: PLEASE LIKE THE ANSWER YOUR RESPONSE MATTER  Account titles and explanation Debit Credit…

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A: A journal entry is a record of the business transactions in the accounting books of a business.

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A: Deferred Tax Liability It is the tax which  is due for the current period but it  has not yet been…

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A: PARTICULARS    AMOUNT IN (P) Pre-Tax Accounting income           P1,350,000…

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A: Net Income (Loss) = Total Sales - Operating Expenses    Note: Since Accrual basis of accounting is…

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A: Income statement: The financial statement which reports revenues and expenses from business…

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A: Correct option is D.$100,000   credit to Income Tax Payable account by $100,000.

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.