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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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