Question
Cullumber Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax
Cullumber Co. at the end of 2021, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $435,000 Extra depreciation taken for tax purposes (1,029,000) Estimated expenses deductible for taxes when paid 905,000 Taxable income $311,000 Use of the depreciable assets will result in taxable amounts of $343,000 in each of the next three years. The estimated litigation expenses of $905,000 will be deductible in 2024 when settlement is expected. (a) Your answer has been saved. See score details after the due date. Prepare a schedule of future taxable and deductible amounts. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) 2022 2023 2024 Total Future taxable (deductible) amounts Extra depreciation $ 343000 $ 343000 $ 343000 $ 1029000 Litigation -905000 -905000 eTextbook and MediaAssistance Used Attempts: 1 of 1 used (b) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2021, assuming a tax rate of 30% for all years. (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 0 for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense 130500 Deferred Tax Asset 271500 Deferred Tax Liability 308700 Income Tax Payable
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