Exercise 19-02 (Part Level Submission)The following information is available for Martinez 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%. (c)Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming taxable income of $322,100. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the accounttitles and enter o for the amounts.)Account Titles and ExplanationDebitCreditIncome Tax PayableDeferred Tax LiabilityDeferred Tax AssetIncome Tax PayableClick if you would like to Show Work for this question: Open Show Work

When the tax paid for the year is less than tax liability as per the records, this means additional…

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 19-02 (Part Level Submission)

The following information is available for Martinez 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%.

(c)
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming taxable income of $322,100. (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.)
Account Titles and Explanation
Debit
Credit
Income Tax Payable
Deferred Tax Liability
Deferred Tax Asset
Income Tax Payable
Click if you would like to Show Work for this question: Open Show Work

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