Jennifer Capriati Corp. has a deferred tax asset account with a balance of $75,000 at the end of 2019 due to a single cumulative temporary difference of $375,000. At the end of 2020, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2020 is $820,000. The tax rate is 20% for all years. At the end of 2019, Jennifer Capriati Corp. had a valuation account related to its deferred tax asset of $22,500o. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized in full. (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 TIncome Tax Expense 149,000 Deferred Tax Asset 15,000 Income Tax Payable 164,000 (To record income tax expense) Allowance to Reduce Defer 15000 Income Tax Expense 15,000 (To adjust allowance account) (b) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that none of the deferred tax asset will be realized. (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 Income Tax Expense 149,000 [Deferred Tax Asset 15,000 Income Tax Payable 164,000 (To record income tax expense) Income Tax Expense 30000 Allowance to Reduce De 32800 (To record allowance)
Jennifer Capriati Corp. has a deferred tax asset account with a balance of $75,000 at the end of 2019 due to a single cumulative temporary difference of $375,000. At the end of 2020, this same temporary difference has increased to a cumulative amount of $450,000. Taxable income for 2020 is $820,000. The tax rate is 20% for all years. At the end of 2019, Jennifer Capriati Corp. had a valuation account related to its deferred tax asset of $22,500o. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized in full. (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 TIncome Tax Expense 149,000 Deferred Tax Asset 15,000 Income Tax Payable 164,000 (To record income tax expense) Allowance to Reduce Defer 15000 Income Tax Expense 15,000 (To adjust allowance account) (b) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that none of the deferred tax asset will be realized. (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 Income Tax Expense 149,000 [Deferred Tax Asset 15,000 Income Tax Payable 164,000 (To record income tax expense) Income Tax Expense 30000 Allowance to Reduce De 32800 (To record allowance)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Jennifer Capriati Corp. has a
(a) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized in full. (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.)
(b) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that none of the deferred tax asset will be realized. (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.)
Transcribed Image Text:Jennifer Capriati Corp. has a deferred tax asset account with a balance of $75,000 at the end of 2019 due to a single cumulative temporary difference of $375,000. At the end of 2020, this same temporary difference has increased to a cumulative amount of $450,000.
Taxable income for 2020 is $820,000. The tax rate is 20% for all years. At the end of 2019, Jennifer Capriati Corp. had a valuation account related to its deferred tax asset of $22,500o.
(a) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized in full. (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
TIncome Tax Expense
149,000
Deferred Tax Asset
15,000
Income Tax Payable
164,000
(To record income tax expense)
Allowance to Reduce Defer
15000
Income Tax Expense
15,000
(To adjust allowance account)
Transcribed Image Text:(b) Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that none of the deferred tax asset will be realized. (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
Income Tax Expense
149,000
[Deferred Tax Asset
15,000
Income Tax Payable
164,000
(To record income tax expense)
Income Tax Expense
30000
Allowance to Reduce De
32800
(To record allowance)
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