Question
The following information is available for Marigold Corporation for 2020. 1.Depreciation reported on the tax return exceeded depreciation reported on the income statement by $130,000.
The following information is available for Marigold Corporation for 2020.
1.Depreciation reported on the tax return exceeded depreciation reported on the income statement by $130,000. This difference will reverse in equal amounts of $32,500over the years 2021-2024
2.Interest received on municipal bonds was $11,000.
3.Rent collected in advance on January 1, 2020, totaled $59,400for a 3-year period. Of this amount, $39,600was reported as unearned at December 31, 2020, for book purposes.
4.The tax rates are40% for 2020 and35% for 2021 and subsequent years.
5.Income taxes of $297,000are 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 $_____
Compute pretax financial income for 2020.
Pretax financial income for 2020 $_____
Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Assume taxable income was $893,000in 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.)
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).)
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