Question
White Inc. had the following amounts that may or may not affect taxable income: Deferred rent revenue$25,000 Macrs depreciation in excess of book....20,000 Interest income
White Inc. had the following amounts that may or may not affect taxable income:
Deferred rent revenue$25,000
Macrs depreciation in excess of book....20,000
Interest income from municipal bonds..20,000
Accrued warranty expense..25,000
Accrued interest income earned on deposits.10,000
Prepaid insurance paid 12/20/2019 10,000
Taxable income is $200,000 and the tax rate for 2019 is 40%
Required:
1.Prepare a schedule to compute pretax accounting income.
2. Prepare the appropriate journal entry to record 2019 income tax expense.
3. Assume that on January 1, 2019 the Deferred tax asset account had a balance of $10,000. Prepare the appropriate journal entry to record 2019 income tax expense if taxable income was $200,000 and the 2019 tax rate was 40%.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started