Tax rate is 25%
b. Prepare the journal entry to record income tax expense for the year. - Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). c. Determine pretax GAAP income for the year. Pretax GAAP Income: $ d. Prepare the income tax section of the income statement for the year and provide the disclosure of current and deferred tax expense. - Note: Do not use negative signs with your answers. e. Determine the deferred income tax that would be recognized on the balance sheet on December 31 . Recording and Reporting Multiple Temporary Differences TNA Corporation reported the following year-end data related to income taxes. - Unrealized gain on the company's investment portfolio, $87,500; recognized in net income for GAAP purposes at the end of the year. Amount will be considered for tax purposes when sold, estimated to be in two years. Fair value of the investment portfolio on December 31 is $700,000. - Estimated litigation expense, $52,500; accrued for GAAP purposes at the end of the year. Amount will be considered for income tax purposes when paid, estimated to be at the end of next year. - Taxable income (from the tax return) at the end of the year, $175,000; the enacted income tax rate is 25%. There were no deferred tax amounts at the beginning of the year. Required a. Prepare schedules to compute the deferred tax balances on December 31. - Note: Do not use negative signs with your answers. b. Prepare the journal entry to record income tax expense for the year. - Note: If a line in a journal entry isn't required for the transaction, select "N/A" as the account names and leave the Dr. and Cr. answers blank (zero). c. Determine pretax GAAP income for the year. Pretax GAAP Income: $ d. Prepare the income tax section of the income statement for the year and provide the disclosure of current and deferred tax expense. - Note: Do not use negative signs with your answers. e. Determine the deferred income tax that would be recognized on the balance sheet on December 31 . Recording and Reporting Multiple Temporary Differences TNA Corporation reported the following year-end data related to income taxes. - Unrealized gain on the company's investment portfolio, $87,500; recognized in net income for GAAP purposes at the end of the year. Amount will be considered for tax purposes when sold, estimated to be in two years. Fair value of the investment portfolio on December 31 is $700,000. - Estimated litigation expense, $52,500; accrued for GAAP purposes at the end of the year. Amount will be considered for income tax purposes when paid, estimated to be at the end of next year. - Taxable income (from the tax return) at the end of the year, $175,000; the enacted income tax rate is 25%. There were no deferred tax amounts at the beginning of the year. Required a. Prepare schedules to compute the deferred tax balances on December 31. - Note: Do not use negative signs with your answers
