Recording Income Tax Expense Aquafena Inc. recognized taxable income of $100,000 for the year ended December 31. Aquafena calculated a deferred tax asset and a deferred tax liability of $12,000 and $8,000, respectively, on December 31. The tax rate is 25%. Assume zero beginning balances in deferred tax accounts. Required a. Determine the increase in income tax payable on December 31. $ 21,000 x b. Prepare the income tax expense journal entry on December 31. Date Dec. 31 Income Tax Expense Deferred Tax Asset Account Name Income Tax Payable Deferred Tax Liability To record income tax expense. << < < Dr. 21,000 12,000 0 0 Cr. 0✓ 0✓ 25,000 ✓ 8,000✔

Recording Income Tax Expense Aquafena Inc. recognized taxable income of $100,000 for the year ended December 31. Aquafena calculated a deferred tax asset and a deferred tax liability of $12,000 and $8,000, respectively, on December 31. The tax rate is 25%. Assume zero beginning balances in deferred tax accounts. Required a. Determine the increase in income tax payable on December 31. $ 21,000 x b. Prepare the income tax expense journal entry on December 31. Date Dec. 31 Income Tax Expense Deferred Tax Asset Account Name Income Tax Payable Deferred Tax Liability To record income tax expense. << < < Dr. 21,000 12,000 0 0 Cr. 0✓ 0✓ 25,000 ✓ 8,000✔

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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