Question
Complete the work sheet. In completing the worksheet, compute State of Illinois corporate income taxes at 41/2% of pretax income. The state income tax is
Complete the work sheet. In completing the worksheet, compute State of Illinois corporate income taxes at 41/2% of pretax income. The state income tax is deductible on the federal tax return, and the federal tax is not deductible on the Illinois return. Assume federal corporate income tax on income subject to federal tax is as follows: First $50,000 @15% Next 25,000 @25% Remainder @34% Income between $100,000 and $335,000 is assessed a 5% federal surtax, not to exceed $11,750. Hint: Corporations subject to federal income tax must make estimated tax payments throughout the year. At the time of the payment, the account Income Tax Expense is debited and Cash is credited. To determine the taxable income at year end, net the total debits and total credits from the income statement in the worksheet. Note that the estimated income tax expense is listed as a debit and must be subtracted from total debits when determining taxable income (federal tax is not a deductible item). Prepare the journal entry for income taxes SB: The pretax income is $254,608 and the estimated income tax expense throughout the year is $72,000. After my calculation, I got $74,817 for the federal income tax and $11,457 for the state income tax. My only problem is how to figure the amount I have to journalize for income taxes: Dr Income tax expense ? Cr Income taxes payable ?
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