Single Temporary Difference: Multiple Rates At the end of 2019, Fulhage Company reported taxable income of $9,000 and pretax financial income of $10,600. The difference is due to depreciation for tax purposes in excess of depreciation for financial reporting purposes. The income tax rate for the current year is 40%, but Congress has enacted tax rates of 35% for 2020 and 30% for 2021 and beyond. Fulhage has calculated the excess of its financial depreciation over its tax depreciation for future years as follows: 2020, $600; 2021, $700; and 2022, $300. Prior to 2019, the company had no deferred tax liability or asset. Required: Prepare Fulhage’s income tax journal entry at the end of 2019.
E18-4 Single Temporary Difference: Multiple Rates At the end of 2019, Fulhage Company reported taxable income of $9,000 and pretax financial income of $10,600. The difference is due to
Fulhage has calculated the excess of its financial depreciation over its tax depreciation for future years as follows: 2020, $600; 2021, $700; and 2022, $300. Prior to 2019, the company had no
Prepare Fulhage’s income tax
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