Question
On 2022/01/01, Orange Company has zero balance of deferred tax and expects to earn profits in the future years. On 2022/12/31, the company has pretax
On 2022/01/01, Orange Company has zero balance of deferred tax and expects to earn profits in the future years.
On 2022/12/31, the company has pretax financial income of $450,000 and a temporary difference that will reverse in the future. This temporary difference will cause the following deductible amounts of in the future years.
| Year | 2023 | 2024 | 2025 |
| Deductible Amount | $90,000 | $80,000 | $95,000 |
The tax rate remains 35%.
Instructions
- Calculate the following: 1. the taxable income, and 2. the income taxes payable of Orange Company in 2022. (5 marks)
- Prepare the journal entries in 2022. (3 marks)
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Management Audits For Excellence
Authors: Dorsey J. Talley
1st Edition
0873890396, 978-0873890397
