Culver Company reports pretax financial income of $66,300 for 2020. The following items cause taxable income to be different than pretax financial income.

1.Depreciation on the tax return is greater than depreciation on the income statement by $16,200.2.Rent collected on the tax return is greater than rent recognized on the income statement by $21,100.3.Fines for pollution appear as an expense of $10,700 on the income statement.

Culvers tax rate is 30% for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020.

(a)

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Correct Answer

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Compute taxable income and income taxes payable for 2020.

Taxable income

$enter a dollar amount

Income taxes payable

$enter a dollar amount

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Solution

List of Accounts

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(b)

Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (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

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount

enter an account title

enter a debit amount

enter a credit amount