During 20X6, the Castle Heights Corp. income statement reported income of $300,000 before tax. The company's income

Question:

During 20X6, the Castle Heights Corp. income statement reported income of $300,000 before tax. The company's income tax return filed with the IRS showed taxable income of $250,000. During 20X6, Castle Heights was subject to an income tax rate of 40%.

Required

1. Journalize Castle Heights' income taxes for 20X6.

2. How much income tax did Castle Heights have to pay currently for the year 20X6?

3. At the beginning of 20X6, Castle Heights' balance of Deferred Tax Liability was $40,000. How much Deferred Tax Liability did Castle Heights report on its balance sheet at December 31, 20X6?

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...