Answered step by step
Verified Expert Solution
Question
1 Approved Answer
P19-1 (LO1,2,4) Three Differences, No Beginning Deferred Taxes, Multiple Rates 2 The following information is available for Remmers Corporation for 2020 3 4 5
P19-1 (LO1,2,4) Three Differences, No Beginning Deferred Taxes, Multiple Rates 2 The following information is available for Remmers Corporation for 2020 3 4 5 6 7 1 Depreciation reported on the tax return exceeded depreciation reported on the income statement Difference $ 120,000 Annual reversal in equal amounts over the years 2021 to 2024 82 Interest received on municipal bonds $ 30,000 $ 10,000 9 3. Rent collected in advance on January 1, 2020 for a 3-year period $ 60,000 10 Income tax rate for 2020 11 12 4 13 14 5. Income taxes due per the tax return for 2020 15 6. No deferred taxes existed at the beginning of 2020 16 17 Instructions: 18 (a) Compute taxable income for 2020 19 20 Portion of rent reported as unearned at December 31, 2020 for book purposes $ 40,000 20% Income tax rate for 2021 and subsequent years 17% $ 160,000 21 22 23 24 (b) Compute pretax financial income for 2020. 25 26 27 28 29 30 31 33 34 (c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Taxable income for 2021 35 36 37 38 39 2020 40 41 42 43 44 45 2021 46 47 48 -19 50 $ 480,000 Debit Credit 51 (d) Prepare the income tax expense section of the income statement for 2020, beginning with 52 "Income before income taxes
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started