Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kent Wesley is a junior member of the external audit team hired to audit Aldridge Inc.'s Year 2 financial statements. Kent has been tasked

  

Kent Wesley is a junior member of the external audit team hired to audit Aldridge Inc.'s Year 2 financial statements. Kent has been tasked with reviewing differences related to Aldridge's financial statements versus its tax forms from Year 1 in order to prepare for the Year 2 audit. After reading through the workpapers gathered from the company's financial reporting group, Wesley prepares notes shown in the exhibit to discuss with his manager. Use the information contained in the exhibit to fill out the tables below. Select the answers from the option lists provided. 1. For each of the items listed above, populate the table below: A B C Deferred Tax Asset (DTA) or Deferred Tax Liability (DTL) 1 Temporary or Item Permanent Difference 2 Depreciation 3 Life insurance payout 4 Fine to the IRS 5 Royalties received 6 Bad debt expense 2. What is the journal entry associated with the transactions above for Year 1? Account Name Debit Credit Income Tax Expense 123 123 123 123 Change in DTA 123 123 Change in DTL Income Tax Payable 123 123 3. What is the journal entry associated with the transactions above for Year 2? Account Name Debit Credit 123 123 Income Tax Expense 123 123 Change in DTA 123 123 Change in DTL 123 123 Income Tax Payable

Step by Step Solution

3.34 Rating (169 Votes )

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Decision Modeling With Spreadsheets

Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair

3rd Edition

136115837, 978-0136115830

More Books

Students also viewed these Business Communication questions

Question

Using a graphing utility, graph y = cot -1 x.

Answered: 1 week ago