Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2024 through 2025 except for differences in depreciation on an operational asset. The asset cost $170,000 and is depreciated for income tax purposes in the following amounts: 2024 2025 2026 2027 $ 56,100 74,800 25,500 13,600 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2024 2025 2026 2027 $ 95,000 $ 115,000 $ 105,000 $ 105,000 Accounting income before taxes and depreciation Assume the income tax rate for 2024 and 2025 was 30%; however, during 2025, tax legislation was passed to raise the tax rate to 40% beginning in 2026. The 40% rate remained in effect through the years 2026 and 2027. Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2024 through 2027.

Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2024 through 2025 except for differences in depreciation on an operational asset. The asset cost $170,000 and is depreciated for income tax purposes in the following amounts: 2024 2025 2026 2027 $ 56,100 74,800 25,500 13,600 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2024 2025 2026 2027 $ 95,000 $ 115,000 $ 105,000 $ 105,000 Accounting income before taxes and depreciation Assume the income tax rate for 2024 and 2025 was 30%; however, during 2025, tax legislation was passed to raise the tax rate to 40% beginning in 2026. The 40% rate remained in effect through the years 2026 and 2027. Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2024 through 2027.

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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