Skysong Corporation began operations in 2025 and reported pretax financial income of $212,000 for the year. Skysong's tax depreciation exceeded its book depreciation by $33,000. Skysong's tax rate for 2025 and years thereafter is 30%. Assume this is the only difference between Skysong's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet. O search Deferred tax liability should be classified as a Debit 5 Credit on the December 31, 2025, balance sheet.

Skysong Corporation began operations in 2025 and reported pretax financial income of $212,000 for the year. Skysong's tax depreciation exceeded its book depreciation by $33,000. Skysong's tax rate for 2025 and years thereafter is 30%. Assume this is the only difference between Skysong's pretax financial income and taxable income. Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet. O search Deferred tax liability should be classified as a Debit 5 Credit on the December 31, 2025, balance sheet.

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

Skysong Corporation began operations in 2025 and reported pretax financial income of $212,000 for the year. Skysong's tax
depreciation exceeded its book depreciation by $33,000. Skysong's tax rate for 2025 and years thereafter is 30%. Assume this is the
only difference between Skysong's pretax financial income and taxable income.
Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. (List all debit entries
before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required,
select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Show how the deferred tax liability will be classified on the December 31, 2025, balance sheet.
Deferred tax liability should be classified as a
Debit
to search
Credit
on the December 31, 2025, balance sheet.

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