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Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense

Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense Prepare the income tax entry or entries. A View transaction list No 1 2 Date 20X8 20X8 View journal entry worksheet Income tax expense Deferred income tax asset Income tax payable Income tax payable Income tax expense General Journal Debit Credit 138,600
Transcribed Image Text:Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense Prepare the income tax entry or entries. A View transaction list No 1 2 Date 20X8 20X8 View journal entry worksheet Income tax expense Deferred income tax asset Income tax payable Income tax payable Income tax expense General Journal Debit Credit 138,600
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