Recording and Reporting Multiple Temporary Differences The records of Cross Corporation provided the following income tax allocation data. Taxable income Depreciation expense Bad debt expense Pretax GAAP income o The depreciation adjustment results from a difference between the GAAP basis and tax basis of depreciable equipment. • The bad debt expense adjustment results from a difference between the GAAP basis and tax basis of net accounts receivable. o The deferred tax accounts have a zero balance at the start of 2020. Tax rate is 25%. Required Journal Entries Financial Statement Presentation a. Record the income tax journal entry on December 31, 2020. b. Record the income tax journal entry on December 31, 2021. c. Record the income tax journal entry on December 31, 2022. d. Record the income tax journal entry on December 31, 2023. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry. a. Date Dec. 31, 2020 b. Date Dec. 31, 2021 C. 2020 2021 2022 2023 $60,000 $80,000 $85,000 $75,000 15,000 (5,000) (5,000) (5,000) (20,000) (10,000) (18,000) 25,000 $55,000 $65,000 $62,000 $95,000 Date Dec. 31, 2022 d. Date Dec. 31, 2023 Account Name Account Name Account Name Account Name ● + + + ● ● + + + + + + + + Dr. Dr. Dr. Dr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cr. Cr. Cr. Cr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Recording and Reporting Multiple Temporary Differences The records of Cross Corporation provided the following income tax allocation data. Taxable income Depreciation expense Bad debt expense Pretax GAAP income o The depreciation adjustment results from a difference between the GAAP basis and tax basis of depreciable equipment. • The bad debt expense adjustment results from a difference between the GAAP basis and tax basis of net accounts receivable. o The deferred tax accounts have a zero balance at the start of 2020. Tax rate is 25%. Required Journal Entries Financial Statement Presentation a. Record the income tax journal entry on December 31, 2020. b. Record the income tax journal entry on December 31, 2021. c. Record the income tax journal entry on December 31, 2022. d. Record the income tax journal entry on December 31, 2023. • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. • Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry. a. Date Dec. 31, 2020 b. Date Dec. 31, 2021 C. 2020 2021 2022 2023 $60,000 $80,000 $85,000 $75,000 15,000 (5,000) (5,000) (5,000) (20,000) (10,000) (18,000) 25,000 $55,000 $65,000 $62,000 $95,000 Date Dec. 31, 2022 d. Date Dec. 31, 2023 Account Name Account Name Account Name Account Name ● + + + ● ● + + + + + + + + Dr. Dr. Dr. Dr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cr. Cr. Cr. Cr. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question

Transcribed Image Text:Required
Journal Entries Financial Statement Presentation
e. Prepare the income tax section of the income statement for 2020 and provide the disclosure of current and deferred tax expense.
f. Indicate the deferred income tax amount that would be recognized on the balance sheet at December 31, 2020.
• Note: Do not use negative signs with your answers.
e.
Partial Income Statement
For the year ended December 31, 2020
Income before income taxes
Income tax expense
Net income
Financial Statement Disclosure
Current tax expense
Total income tax expense
f.
Balance Sheet, Dec. 31
♦
$
$
$
2020
$
2020
0
0
0
0
$
Please answer all parts of the question.
OO
0
0
0

Transcribed Image Text:Recording and Reporting Multiple Temporary Differences
The records of Cross Corporation provided the following income tax allocation data.
Taxable income
Depreciation expense
Bad debt expense
Pretax GAAP income
Required
• The depreciation adjustment results from a difference between the GAAP basis and tax basis of depreciable equipment.
• The bad debt expense adjustment results from a difference between the GAAP basis and tax basis of net accounts receivable.
o The deferred tax accounts have a zero balance at the start of 2020. Tax rate is 25%.
a.
Journal Entries
a. Record the income tax journal entry on December 31, 2020.
b. Record the income tax journal entry on December 31, 2021.
c. Record the income tax journal entry on December 31, 2022.
d. Record the income tax journal entry on December 31, 2023.
• Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
• Note: If the journal entry includes an extra line that is not required, select "N/A" as the account name and leave the Dr. and Cr. answers blank (zero) in the very last row of the journal entry.
Date
Dec. 31, 2020
b.
Date
Dec. 31, 2021
C.
d.
Date
Dec. 31, 2022
2020 2021 2022 2023
$60,000 $80,000 $85,000 $75,000
15,000 (5,000) (5,000) (5,000)
(20,000) (10,000) (18,000) 25,000
$55,000 $65,000 $62,000 $95,000
Date
Dec. 31, 2023
Financial Statement Presentation
Account Name
Account Name
Account Name
Account Name
+
+
+
+
+
+
+
+
+
+
●
+
+
+
Dr.
Dr.
Dr.
Dr.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Cr.
Cr.
Cr.
Cr.
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
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