Bandung Corporation began 2008 with a $92,000 balance in the Deferred Tax Liability account. At the end
Question:
Bandung Corporation began 2008 with a $92,000 balance in the Deferred Tax Liability account. At the end of 2008, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years.
Pretax accounting income for 2008 is $525,000, the tax rate for all years is 40%, and taxable income for 2008 is $405,000.
Instructions
(a) Compute income taxes payable for 2008.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2008.
(c) Prepare the income tax expense section of the income statement for 2008 beginning with the line “Income before income taxes.”
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
a Taxable income for 2008 405000 Enacted tax rate X 40 Income tax payable for 2008 162000 b Future Y...View the full answer
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
