CH19 - E19-5 a. Alschule Corporation Compute income taxes...

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E19-5 a. Alschule Corporation Compute income taxes payable For 2010 Taxable income $115,000 Enacted tax rate 40% Income tax payable $46,000 b. Alschule Corporation Journal entries For 2010 Income Tax Expense 80,000 Deferred Tax Asset 14,000 Income Tax Payable 46,000 Deferred Tax Liability 48,000 Alschule Corporation Deferred Tax For 2010 Temporary Future Taxable Tax Deferred Tax Difference (Deductible) Amounts Rate (Asset) Liability First one $220,000 40% $88,000 Second one (35,000) 40% (14,000) Totals $185,000 ($14,000) $88,000 Alschule Corporation Income tax expense For 2010 Deferred tax asset at the end of 2010 $14,000 Deferred tax asset at the beginning of 2010 0 Deferred tax benefit for 20010(increase required in deferred tax asset) ($14,000) Deferred tax liability at the end of 2010 $88,000 Deferred tax liability at the beginning of 2010 40,000 Deferred tax expense for 2010 (increase required in deferred tax liability) $48,000 Deferred tax expense for 2010 $48,000 Deferred tax benefit for 2010 (14,000) Net deferred tax benefit for 2010 34,000 Current tax expense for 2010(Income tax payable) 46,000 Income tax expense for 2010 $80,000
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E19-5 Alschule Corporation c. Income Statement (Partial) For 2010 Income before income taxes $200,000 Income tax expense Current $46,000 Deferred 34,000 80,000 Net income $120,000 Alschule Corporation ComputeTaxable income For 2010 Pretax financial income $200,000 (120,000) Originating temporary differences giving rise to future deductible amounts 35,000 Taxable income $115,000 Net origination temporary difference giving rise to future taxable amounts ($220,000-$40,000/40%)
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This note was uploaded on 11/16/2010 for the course ACCT acct 103 taught by Professor Rishard during the Spring '10 term at American River.

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CH19 - E19-5 a. Alschule Corporation Compute income taxes...

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