Brennan Corporation began 2019 with a $90,000 balance in the Deferred Tax Liability account. At the end
Question:
Brennan Corporation began 2019 with a $90,000 balance in the Deferred Tax Liability account. At the end of 2019, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2019 is $525,000, the tax rate for all years is 40%, and taxable income for 2019 is $400,000.
Instructions
a. Compute income taxes payable for 2019.
b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019.
c. Prepare the income tax expense section of the income statement for 2019, beginning with the line "Income before income taxes."
Step by Step Answer:
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield