The following information is available for Oriole Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $118,000. This difference will reverse in equal amounts of $29,500 over the years 2026-2029. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2025, totaled $58,800 for a 3-year period. Of this amount, $39,200 was reported as unearned at December 31, 2025, for book purposes. 4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years. 5. Income taxes of $173,000 are due per the tax return for 2025. 6. No deferred taxes existed at the beginning of 2025. Compute taxable income for 2025. Taxable income for 2025 $ Compute pretax financial income for 2025. Pretax financial income for 2025 $ 865000 953800 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $365,000 in 2026. (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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 2025 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 2026 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset Debit 186396 6664 60367 5015 Credit 173000 20060 62050 3332 Prepare the income tax expense section of the income statement for 2025, beginning with "Income before income taxes." (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Income before Income Taxes Income Tax Expense Current Deferred Net Income/(Loss) ORIOLE CORPORATION Income Statement (Partial) For the Year Ended December 31, 2025 $ 173000 i 6 $ LA 953800
The following information is available for Oriole Corporation for 2025. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $118,000. This difference will reverse in equal amounts of $29,500 over the years 2026-2029. 2. Interest received on municipal bonds was $10,000. 3. Rent collected in advance on January 1, 2025, totaled $58,800 for a 3-year period. Of this amount, $39,200 was reported as unearned at December 31, 2025, for book purposes. 4. The tax rates are 20% for 2025 and 17% for 2026 and subsequent years. 5. Income taxes of $173,000 are due per the tax return for 2025. 6. No deferred taxes existed at the beginning of 2025. Compute taxable income for 2025. Taxable income for 2025 $ Compute pretax financial income for 2025. Pretax financial income for 2025 $ 865000 953800 Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026. Assume taxable income was $365,000 in 2026. (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. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation 2025 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 2026 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset Debit 186396 6664 60367 5015 Credit 173000 20060 62050 3332 Prepare the income tax expense section of the income statement for 2025, beginning with "Income before income taxes." (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Income before Income Taxes Income Tax Expense Current Deferred Net Income/(Loss) ORIOLE CORPORATION Income Statement (Partial) For the Year Ended December 31, 2025 $ 173000 i 6 $ LA 953800
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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Transcribed Image Text:The following information is available for Oriole Corporation for 2025.
1.
Depreciation reported on the tax return exceeded depreciation reported on the income statement by $118,000. This
difference will reverse in equal amounts of $29,500 over the years 2026-2029.
2.
Interest received on municipal bonds was $10,000.
3.
Rent collected in advance on January 1, 2025, totaled $58,800 for a 3-year period. Of this amount, $39,200 was reported as
unearned at December 31, 2025, for book purposes.
4.
The tax rates are 20% for 2025 and 17% for 2026 and subsequent years.
5.
Income taxes of $173,000 are due per the tax return for 2025.
6.
No deferred taxes existed at the beginning of 2025.
Compute taxable income for 2025.
Taxable income for 2025
$
Compute pretax financial income for 2025.
Pretax financial income for 2025 $
865000
953800
Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2025 and 2026.
Assume taxable income was $365,000 in 2026. (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. Record journal entries in the order presented in the problem.)
Date Account Titles and Explanation
2025
Income Tax Expense
Deferred Tax Asset
Income Tax Payable
Deferred Tax Liability
2026
Income Tax Expense
Deferred Tax Liability
Income Tax Payable
Deferred Tax Asset
Debit
186396
6664
60367
5015
Credit
173000
20060
62050
3332
Prepare the income tax expense section of the income statement for 2025, beginning with "Income before income taxes." (Enter
negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Income before Income Taxes
Income Tax Expense
Current
Deferred
Net Income/(Loss)
ORIOLE CORPORATION
Income Statement (Partial)
For the Year Ended December 31, 2025
$
173000 i
6
$
LA
953800
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