At the end of 2015, Wasicsko Company has €180,000 of cumulative temporary differences that will result in reporting future taxable amounts as follows.

Tax rates enacted as of the beginning of 2014 are:

Wasicsko’s taxable income for 2015 is €340,000. Taxable income is expected in all future years.
Instructions

(a) Prepare the journal entry for Wasicsko to record income taxes payable, deferred income taxes, and income tax expense for 2015, assuming that there were no deferred taxes at the end of 2014.

(b) Prepare the journal entry for Wasicsko to record income taxes payable, deferred income taxes, and income tax expense for 2015, assuming that there was a balance of €22,000 in a Deferred Tax Liability account at the end of 2014.

Transcribed Image Text:

2016 2017 2018 70,000 50,000 40,000 2019 20,000 180,000