Intermediate Accounting $301$

Ch $18-$ Deferred Tax Assignment

$5$ points

Nam

The following is available for the taxable and pretax GAAP financial income of Film

Company for $2025$ :

Interest on municipal securities included in net income in $2025$ was $$5,000.$

Depreciation recognized in the tax return exceeded that in the financial statement

income statement by $$100,000.$ This temporary difference will reverse evenly

during $2026$ and $2027.$

The company has accrued revenue of $$10,000$ in $2025$ for financial reporting

purposes, however the tax laws allow them to deferred showing this as a taxable

revenue until $2026$ when the cash will be collected.

Film's pretax GAAP financial net income for $2025$ was $$300,000$ and the company's

income tax rate was $35\%.$ This rate is scheduled to change to $40\%$ for $2026$ and $2027.$

A$.$ Prepare below a deferred income tax schedule for $2025.$ Show all timing

differences in the appropriate year's column.

$2025$

$2026$

$2027$

B$.$ Prepare the general journal entry to accrue income taxes for $2025.$ Assume

there was no prior balance in the company's deferred income tax account.