The pretax financial income of Flounder Company differs from its taxable income throughout each of 4 years as follows. Pretax Year Financial Income Taxable Income Tax Rate 2020 $295,000 $181,000 35 % 2021 300,000 231,000 20 % 2022 341,000 252,000 20 % 2023 426,000 527,000 20 % Pretax financial income for each year includes a nondeductible expense of $32,800 (never deductible for tax purposes). The remainder of the difference between pretax fınancial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 20% was not enacted until the beginning of 2021. (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.)
The pretax financial income of Flounder Company differs from its taxable income throughout each of 4 years as follows. Pretax Year Financial Income Taxable Income Tax Rate 2020 $295,000 $181,000 35 % 2021 300,000 231,000 20 % 2022 341,000 252,000 20 % 2023 426,000 527,000 20 % Pretax financial income for each year includes a nondeductible expense of $32,800 (never deductible for tax purposes). The remainder of the difference between pretax fınancial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2020. Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 20% was not enacted until the beginning of 2021. (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.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 10E: Multiple Temporary Differences Vickers Company reports taxable income of 4,500 for 2019. Vickers has...
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