During 2017 Kate Holme Co. first year of operations, the company reports pre-tax financial income at $250,000. Holmes enacted a tax rate of is 45% for 2017 and 40% for all the years later. Holmes expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at Dec 31 2017 are summarized as follows:image Future Years20182019202020212022TotalFuture taxable (deductible)amounts:$32,0006,000(50,000)$ 96,00030,000(100,000)Installment sales$32,0006,000(50,000)$32,000DepreciationUnearned rent6,000$6,000$6,000 Instructions(a) Complete the schedule below to compute deferred taxes at December 31, 2017.(b) Compute taxable income for 2017.(c) Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for 2017USE THIS AS GUIDANCEDecember 31, 2017Future Taxable(Deductible)TaxDeferred TaxTemporary DifferenceAmountsRate(Asset)Liability$ 96,000-30,000Installment salesDepreciationUnearned rent(100,000)Totals10Ar23

please like the answer your response matters Calculation of deferred taxes at December 31, 2017as…

Answered: Instructions (a) Complete the schedule…

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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During 2017 Kate Holme Co. first year of operations, the company reports pre-tax financial income at $250,000. Holmes enacted a tax rate of is 45% for 2017 and 40% for all the years later. Holmes expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at Dec 31 2017 are summarized as follows:

image

Future Years
2018
2019
2020
2021
2022
Total
Future taxable (deductible)
amounts:
$32,000
6,000
(50,000)
$ 96,000
30,000
(100,000)
Installment sales
$32,000
6,000
(50,000)
$32,000
Depreciation
Unearned rent
6,000
$6,000
$6,000

Instructions
(a) Complete the schedule below to compute deferred taxes at December 31, 2017.
(b) Compute taxable income for 2017.
(c) Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for 2017
USE THIS AS GUIDANCE
December 31, 2017
Future Taxable
(Deductible)
Tax
Deferred Tax
Temporary Difference
Amounts
Rate
(Asset)
Liability
$ 96,000-
30,000
Installment sales
Depreciation
Unearned rent
(100,000)
Totals
10
Ar
23

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