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Riverbed Inc. reports accounting income of $104,000 for 2020, its first year of operations. The following items cause taxable income to be different than income
Riverbed Inc. reports accounting income of $104,000 for 2020, its first year of operations. The following items cause taxable income to be different than income reported on the financial statements.
1. | Capital cost allowance (on the tax return) is greater than depreciation on the income statement by $15,200. | |
2. | Rent revenue reported on the tax return is $22,800 higher than rent revenue reported on the income statement. | |
3. | Non-deductible fines appear as an expense of $12,800 on the income statement. | |
4. | Riverbeds tax rate is 30% for all years and the company expects to report taxable income in all future years. Riverbed reports under IFRS. |
Prepare the journal entries to record income taxes for 2020. (Credit account titles are automatically indented when the 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.) Year Account Titles and Explanation Debit Credit 2020 (To record current tax expense) 2020 (To record deferred tax benefit) Prepare the income tax expense section of the income statement for 2020, beginning with the line "Income before income tax. Riverbed Inc. (Partial) Income Statement $
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