Nadal Inc. has two temporary differences at the end of 2019. The first difference stems from installment
Question:
Nadal Inc. has two temporary differences at the end of 2019. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Nadal?s accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows.
As of the beginning of 2019, the enacted tax rate is 34% for 2019 and 2020, and 20% for 2021?2024. At the beginning of 2019, the company had no deferred income taxes on its balance sheet. Taxable income for 2019 is $500,000. Taxable income is expected in all future years.
Instructions
a. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.
b. Indicate how deferred income taxes would be classified on the balance sheet at the end of 2019.
Balance SheetBalance 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...
Step by Step Answer:
a Income Tax Expense 221600 Deferred Tax Asset 6800 Income Taxes Payable 170000 Deferred Tax Liabili...View the full answer
Intermediate Accounting
ISBN: 978-1119503668
17th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfiel
