PART C

The following facts relate to Buffalo Corporation. 1. Deferred tax liability, January 1, 2020, $48,800. 2. Deferred tax asset, January 1, 2020, $0. 3. Taxable income for 2020, $115,900. 4. Pretax financial income for 2020, $122,000. 5. Cumulative temporary difference at December 31, 2020, giving rise to future taxable amounts, $292,800. Cumulative temporary difference at December 31, 2020, giving rise to future deductible amounts, $42,700. 6. 7. Tax rate for all years, 20%. The company is expected to operate profitably in the future. 8. Compute income taxes payable for 2020. Income taxes payable $ 23,180 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 O for the amounts.) Account Titles and Explanation Debit Credit Income Tax Expense 24,400 Deferred Tax Asset 8,540 Income Tax Payable 23,180 Deferred Tax Liability 9,760 (c) Prepare the income tax expense section of the income statement for 2020, beginning with the line "Income before income taxes." (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (45).) Buffalo Corporation Income Statement (Partial) UA A > $ $