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Bonita SA has a deferred tax asset account with a balance of 145,840 at the end of 2021 due to a single cumulative temporary difference
Bonita SA has a deferred tax asset account with a balance of 145,840 at the end of 2021 due to a single cumulative temporary difference of 364,600. At the end of 2022, this same temporary difference has increased to a cumulative amount of 492,600. Taxable income for 2022 is 784,300. The tax rate is 40% for all years. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2022, assuming that it is probable that 43,700 of the deferred tax asset will be realized in full. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense 262520 Deferred Tax Asset 51200 Income Taxes Payable 313720 (To record income tax expense) Income Tax Expense 43700 Deferred Tax Asset 43700 (To adjust allowance account) (b) Record income tax expense, deferred income taxes, and income taxes payable for 2022, assuming that it is probable that none of the deferred tax asset will be realized. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense 262520 Deferred Tax Asset 51200 Income Taxes Payable 313720 (To record income tax expense) Income Tax Expense 153340 Deferred Tax Asset 153340 (To record allowance)
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