(One Difference, Multiple Rates, Effect of Beginning Balance versus No Beginning Deferred Taxes) At the end of 2016, Lucretia McEvil Company has $180,000 of cumulative temporary differences that will result in reporting the following future taxable amounts. 2017 $ 60,000 2018 50,000 2019 40,000 2020 30,000 $180,000 Tax rates enacted as of the beginning of 2015 are: 2015 and 2016 40% 2017 and 2018 30% 2019 and later 25% McEvil’s taxable income for 2016 is $320,000. Taxable income is expected in all future years.Instructions(a) Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there were no deferred taxes at the end of 2015.(b) Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there was a balance of $22,000 in a Deferred Tax Liability account at the end of 2015.
(One Difference, Multiple Rates, Effect of Beginning Balance versus No Beginning
2017 | $ 60,000 |
2018 | 50,000 |
2019 | 40,000 |
2020 | 30,000 |
$180,000 |
Tax rates enacted as of the beginning of 2015 are:
2015 and 2016 | 40% |
2017 and 2018 | 30% |
2019 and later | 25% |
McEvil’s taxable income for 2016 is $320,000. Taxable income is expected in all future years.
Instructions
(a) Prepare the
(b) Prepare the journal entry for McEvil to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there was a balance of $22,000 in a
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images