Whispering Corporation began 2017 with a $94,200 balance in the Deferred Tax Liability account. At the end of 2017, the related cumulative temporary difference amounts to $352,400, and it will reverse evenly over the next 2 years. Pretax accounting income for 2017 is $505,400, the tax rate for all years is 40%, and taxable income for 2017 is $388,500.
Part 1
Compute income taxes payable for 2017.
Income taxes payable
$
Part 2
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2017. (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.)
Account Titles and Explanation
Debit Credit
Part 3
Prepare the income tax expense section of the income statement for 2017 beginning with the line "Income before income taxes.". (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Question

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Respuesta :

Tundexi Tundexi · Answer 1 · 2020-08-15T03:19:06+02:00

Answer:

1. Income tax payable = Taxable income for 2017 * Income tax rate

Income tax payable = $388,500 * 40%

Income tax payable = $155,400

2. Journal Entry

Account Titles and Explanations Debit Credit

Income tax expense $202,160

($505,400*40%)

Deferred tax liability $46,760

($202,160-$155,400)

Income tax payable $155,400

($388,500*40%)

3. Income Statement (Partial)

For the Year Ended Dec 31, 2017

Income before income taxes $505,400

Income tax expense

Current $155,400

Deferred $46,760 $202,160

Net Income $303,240