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Unformatted text preview: $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 40%. Required: The tax liability for the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Show well-labeled computations. Answer: Income tax expense (to balance) Deferred tax asset ($300,000 x 40%) Income tax payable (given) Learning Objective: 2 Level of Learning: 3 630,000 120,000 750,000...
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- Spring '12