During 2012, Campbell Heights Corp.s income statement reported income of $300,000 before tax. The companys income tax

Question:

During 2012, Campbell Heights Corp.’s income statement reported income of $300,000 before tax. The company’s income tax return filed with the IRS showed taxable income of $260,000. During 2012, Campbell Heights was subject to an income tax rate of 25%.

Requirements

1. Journalize Campbell Heights’ income taxes for 2012.

2. How much income tax did Florimax Heights have to pay for the year 2012?

3. At the beginning of 2012, Florimax Heights’ balance of Deferred Tax Liability was $38,000.

How much Deferred Tax Liability did Florimax Heights report on its balance sheet at December 31, 2012?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...