G In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed whencollected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the periodtenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $480,000 at December 31, 2024.DFS had no temporary differences at the beginning of the year.Required:Assuming an income tax rate of 25% and 2024 income tax payable of $930,000, prepare the journal entry to record income taxes for2024.Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Deferred tax refers to the temporary differences between taxable income reported for tax purposes…

Required: Assuming an income tax rate of 25% and 2024 income tax payable of $930,000, prepare the journal entry to record income taxes for 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

Required: Assuming an income tax rate of 25% and 2024 income tax payable of $930,000, prepare the journal entry to record income taxes for 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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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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.

Question

In 2024, DFS Medical Supply collected rent revenue for 2025 tenant occupancy. For income tax reporting, the rent is taxed when
collected. For financial statement reporting, the rent is recorded as deferred revenue and then recognized as revenue in the period
tenants occupy the rental property. The deferred portion of the rent collected in 2024 amounted to $480,000 at December 31, 2024.
DFS had no temporary differences at the beginning of the year.
Required:
Assuming an income tax rate of 25% and 2024 income tax payable of $930,000, prepare the journal entry to record income taxes for
2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field.

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