The pretax financial income of Truttman AG differs from its taxable income throughout each of 4 years
Question:
The pretax financial income of Truttman AG differs from its taxable income throughout each of 4 years as follows.
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Pretax financial income for each year includes a non-deductible expense of €30,000 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2018.
Instructions
a. Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 40% was not enacted until the beginning of 2019.
b. Prepare the income statement for 2019, beginning with income before income taxes.
Step by Step Answer:
a Before deferred taxes can be computed the amount of temporary difference originating reversing each period and the resulting cumulative temporary difference at each yearend must be computed 2018 201...View the full answer
Intermediate Accounting IFRS
ISBN: 978-1119372936
3rd edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
