The following information is available for Sandhill Corporation for 2019 (its first year of operations).1. Excess of tax depreciation over book depreciation, $40,400. This $40,400 difference will reverse equally over the years 2020–2023.2. Deferral, for book purposes, of $19,900 of rent received in advance. The rent will be recognized in 2020.3. Pretax financial income, $284,700.4. Tax rate for all years, 20%. **Journal Entry for Income Tax Expense, Deferred Income Taxes, and Income Taxes Payable for 2019**Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. (Credit account titles are automatically indented when an amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense Deferred Tax Asset Deferred Tax Liability Income Tax Payable **Explanation:**- **Income Tax Expense**: Represents the amount of expense recognized in the accounting period for taxes payable to tax authorities.- **Deferred Tax Asset**: Represents the tax amount that can reduce future taxable income.- **Deferred Tax Liability**: Represents taxes that are due in future periods based on transactions that have already occurred.- **Income Tax Payable**: Represents the total assessable tax amount payable to tax authorities for the current period.*Note: All amounts need to be filled in the respective Debit or Credit columns for the journal entry.*

Solution : Date Particulars Debit Credit 2019 Income tax expense ( 284,700 * 20% ) 56,940…

Answered: The following information is available…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Concept explainers

Question

The following information is available for Sandhill Corporation for 2019 (its first year of operations).

1.		Excess of tax depreciation over book depreciation, $40,400. This $40,400 difference will reverse equally over the years 2020–2023.
2.		Deferral, for book purposes, of $19,900 of rent received in advance. The rent will be recognized in 2020.
3.		Pretax financial income, $284,700.
4.		Tax rate for all years, 20%.

**Journal Entry for Income Tax Expense, Deferred Income Taxes, and Income Taxes Payable for 2019**

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. (Credit account titles are automatically indented when an amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

<table>
<tr>
<th>Account Titles and Explanation</th>
<th>Debit</th>
<th>Credit</th>
</tr>
<tr>
<td>Income Tax Expense</td>
<td></td>
<td></td>
</tr>
<tr>
<td>Deferred Tax Asset</td>
<td></td>
<td></td>
</tr>
<tr>
<td>Deferred Tax Liability</td>
<td></td>
<td></td>
</tr>
<tr>
<td>Income Tax Payable</td>
<td></td>
<td></td>
</tr>
</table>

**Explanation:**
- **Income Tax Expense**: Represents the amount of expense recognized in the accounting period for taxes payable to tax authorities.
- **Deferred Tax Asset**: Represents the tax amount that can reduce future taxable income.
- **Deferred Tax Liability**: Represents taxes that are due in future periods based on transactions that have already occurred.
- **Income Tax Payable**: Represents the total assessable tax amount payable to tax authorities for the current period.

*Note: All amounts need to be filled in the respective Debit or Credit columns for the journal entry.*

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions