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The following information is available for Potters Corporation for 2020. $ 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement
The following information is available for Potters Corporation for 2020. $ 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement Difference Annual reversal in equal amounts over the years 2021 to 2023 2. Interest received on municipal bonds 3. Rent collected in advance on January 1, 2020 for a 3-year period Portion of rent reported as unearned at December 31, 2020 for book purposes 4. Income tax rate for 2020 Income tax rate for 2021 and subsequent years 5. Income taxes due per the tax return for 2020 6. No deferred taxes existed at the beginning of 2020. 75,000 25,000 24,000 45,000 30,000 $ $ 20% 17% 270,000 Instructions: (a) Compute taxable income for 2020. (b) Compute pretax financial income for 2020. c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Taxable income for 2021 $ 760,000 Debit Credit 2020 2021 (d) Prepare the income tax expense section of the income statement for 2020, beginning with "Income before income taxes." The following information is available for Potters Corporation for 2020. $ 1. Depreciation reported on the tax return exceeded depreciation reported on the income statement Difference Annual reversal in equal amounts over the years 2021 to 2023 2. Interest received on municipal bonds 3. Rent collected in advance on January 1, 2020 for a 3-year period Portion of rent reported as unearned at December 31, 2020 for book purposes 4. Income tax rate for 2020 Income tax rate for 2021 and subsequent years 5. Income taxes due per the tax return for 2020 6. No deferred taxes existed at the beginning of 2020. 75,000 25,000 24,000 45,000 30,000 $ $ 20% 17% 270,000 Instructions: (a) Compute taxable income for 2020. (b) Compute pretax financial income for 2020. c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2020 and 2021. Taxable income for 2021 $ 760,000 Debit Credit 2020 2021 (d) Prepare the income tax expense section of the income statement for 2020, beginning with "Income before income taxes
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