Sherrod purchased an asset in 2020 at a cost of $80 million. Depreciation expense for financial and tax purposes is reported in the schedule below. Year Financial depreciation Tax depreciation 2020 $20,000 $32,000 2021 $20,000 $28,000 $15,000 2022 $20,000 2023 $20,000 $ 5,000 Tax rates in 2020 are 20%. In 2021 the tax law changed the tax rate to 25% for 2021 and all future years. Assuming there are no other differences between financial and taxable income, and Income Taxes Payable in 2020 and 2021 is $100,000, complete the income tax entries for 2020 and 2021 in the journal below. 2020 2021 Account Income Tax Expense Income Taxes Payable Income Tax Expense Income Taxes Payable Debit 102,400 102,600 Credit 100,000 100,000
Sherrod purchased an asset in 2020 at a cost of $80 million. Depreciation expense for financial and tax purposes is reported in the schedule below. Year Financial depreciation Tax depreciation 2020 $20,000 $32,000 2021 $20,000 $28,000 $15,000 2022 $20,000 2023 $20,000 $ 5,000 Tax rates in 2020 are 20%. In 2021 the tax law changed the tax rate to 25% for 2021 and all future years. Assuming there are no other differences between financial and taxable income, and Income Taxes Payable in 2020 and 2021 is $100,000, complete the income tax entries for 2020 and 2021 in the journal below. 2020 2021 Account Income Tax Expense Income Taxes Payable Income Tax Expense Income Taxes Payable Debit 102,400 102,600 Credit 100,000 100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please,The answers are in the RED but I am just not sure how to get to those answers!
Transcribed Image Text:Sherrod purchased an asset in 2020 at a cost of $80 million. Depreciation expense for financial and tax
purposes is reported in the schedule below.
Year Financial depreciation
Tax depreciation
2020 $20,000
$32,000
2021 $20,000
$28,000
$15,000
2022 $20,000
2023
$20,000
$ 5,000
Tax rates in 2020 are 20%. In 2021 the tax law changed the tax rate to 25% for 2021 and all future years.
Assuming there are no other differences between financial and taxable income, and Income Taxes
Payable in 2020 and 2021 is $100,000, complete the income tax entries for 2020 and 2021 in the
journal below.
2020
2021
Account
Income Tax Expense
Income Taxes Payable
Income Tax Expense
Income Taxes Payable
Debit
102,400
102,600
Credit
100,000
100,000
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