Question
The following information is available for Headland Corporation for 2020. 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by
The following information is available for Headland Corporation for 2020.
1. | Depreciation reported on the tax return exceeded depreciation reported on the income statement by $114,000. This difference will reverse in equal amounts of $28,500 over the years 20212024. | |
2. | Interest received on municipal bonds was $10,200. | |
3. | Rent collected in advance on January 1, 2020, totaled $61,800 for a 3-year period. Of this amount, $41,200 was reported as unearned at December 31, 2020, for book purposes. | |
4. | The tax rates are 40% for 2020 and 35% for 2021 and subsequent years. | |
5. | Income taxes of $308,000 are due per the tax return for 2020. | |
6. | No deferred taxes existed at the beginning of 2020. |
Compute taxable income for 2020.
Taxable income for 2020 | $enter Taxable income for 2020 in dollars |
List of Accounts
Compute pretax financial income for 2020.
Pretax financial income for 2020 | $enter Pretax financial income for 2020 in dollars |
List of Accounts
Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $1,065,000 in 2021. (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 0 for the amounts.)
Date | Account Titles and Explanation | Debit | Credit |
---|---|---|---|
2020 | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
2021 | enter an account title | enter a debit amount | enter a credit amount |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount | |
enter an account title | enter a debit amount | enter a credit amount |
List of Accounts
Prepare the income tax expense section of the income statement for 2020, beginning with Income before income taxes. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Headland Corporation Income Statement (Partial) choose the accounting period December 31, 2020For the Year Ended December 31, 2020For the Quarter Ended December 31, 2020 | ||
---|---|---|
select an income statement item CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues | $enter a dollar amount | |
select an opening section name CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues | ||
select an income statement item CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues | $enter a dollar amount | |
select an income statement item CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues | enter a dollar amount | |
enter a subtotal of the two previous amounts | ||
select a closing name for this statement CurrentDeferredDividendsExpensesIncome before Income TaxesIncome Tax ExpenseNet Income / (Loss)Retained Earnings, January 1Retained Earnings, December 31RevenuesTotal ExpensesTotal Revenues | $enter a total net income or loss amount |
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