Wicks Corporation began operations on January 1, 2007. At the end of 2007 the company reported pretax
Question:
Wicks Corporation began operations on January 1, 2007. At the end of 2007 the company reported pretax financial income of $60,000 and taxable income of $57,700, due to two temporary differences. The income tax rate is 30% for 2007, but Congress has enacted a tax rate of 35% for 2007 and beyond. To determine its deferred taxes, the company prepared the following schedule of expected future taxable and deductible amounts for the two temporary differences:
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Required
1. Prepare the income tax journal entry of the Wicks Corporation at the end of 2007. Assume a valuation allowance is not required.
2. Prepare the lower portion of the 2007 income statement for the WicksCorporation.
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
Step by Step Answer:
1 2007 Dec 31 Income Tax Expense 17660 d Deferred Tax Asset 5425 c Income ...View the full answer
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
