The following information is available for Whispering Inc. for 2019: 1. Excess of tax depreciation over book depreciation, $77,200. This $77,200 difference will reverse eq years. 2. Deferral, for book purposes, of $26,000 of subscription income received in advance. The subscriptio earned in 2020. 3. Pretax financial income, $206,000. 4. Tax rate for all years, 20%. (a) Compute taxable income for 2019.

The following information is available for Whispering Inc. for 2019: 1. Excess of tax depreciation over book depreciation, $77,200. This $77,200 difference will reverse eq years. 2. Deferral, for book purposes, of $26,000 of subscription income received in advance. The subscriptio earned in 2020. 3. Pretax financial income, $206,000. 4. Tax rate for all years, 20%. (a) Compute taxable income for 2019.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

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.

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The following information is available for Whispering Inc. for 2019:
1.
Excess of tax depreciation over book depreciation, $77,200. This $77,200 difference will reverse equally over the next 4
years.
2.
Deferral, for book purposes, of $26,000 of subscription income received in advance. The subscription income will be
earned in 2020.
3.
Pretax financial income, $206,000.
4.
Tax rate for all years, 20%.
(a)
Compute taxable income for 2019.
Taxable income
$

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Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (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. List all debit entries before credit entries.)
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