Ch 19 HWp - Chapter 19 Homework E 19-1 One temporary...

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Homework E 19-1 One temporary difference at the end of 2010 that will reverse and cause taxable amounts of $55,000 in 2011, $60,000 in 2012, and $75,000 in 2013. Pretax financial income for 2010 is $400,000 and the tax rate is 30% for all years. No deferred taxes at the beginning of 2010 a Compute taxable income and income taxes payable for 2010 Pretax financial income for 2010 400,000 b Temporary difference resulting in future taxable amounts income diff in 2011 (55,000) not tax diff in 2012 (60,000) in 2013 (75,000) Taxable income for 2010 (why not from tax return?) 210,000 Taxable income 210,000 Enacted tax rate 30% Income tax payable 63,000 a b JE to record income tax expense, deferred income taxes, and tax payable for 2010 Future Years 2011 2012 2013 Total Future taxable (deductible) amounts 55,000 60,000 75,000 190,000 Tax rate 30% 30% 30% Deferred tax liability (asset) 16,500 18,000 22,500 57,000 Deferred tax liability - end of year 57,000 Deferred tax liability - begin of year - Deferred tax expense (incr to liab) 57,000 Current tax exp (payable) 63,000 Tax expense for 2010 120,000 Income Tax Expense (400,000x30%) 120,000 b from FS Income Tax Payable 63,000 a from tax return Deferred Tax Liability 57,000 double-check method c Prepare the income tax expense section of the Income Statement Income before income taxes 400,000
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This note was uploaded on 01/13/2011 for the course ACT AC 557 taught by Professor George during the Spring '10 term at DeVry Chicago.

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Ch 19 HWp - Chapter 19 Homework E 19-1 One temporary...

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