E19-2 - Description/Account Solution E19-2(a Pretax...

Info icon This preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
E19-2 (Two Differences, No Beginning Deferred Taxes, Tracked through 2 Years) The following information is available for McKee Corporation for 2012. 1. Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will reverse equally over the years 2013- 2016. 2. Deferral, for book purposes, of $25,000 of rent received in advance. The rent will be earned in 2013. 3. Pretax financial income, $350,000. 4. Tax rate for all years, 40%. (a) Compute taxable income for 2012.       $ (b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2012.  (List multiple debit/credit entrie   Description/Account                 (c) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2013, assuming taxable income of $325,
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Description/Account Solution E19-2 (a) Pretax financial income for 2012 Excess of tax depreciation over book depreciation Rent received in advance Taxable income (b) Description/Account Income Tax Expense Deferred Tax Asset Income Tax Payable ($335,000 × 0.40) Deferred Tax Liability Temporary Difference Future Taxable (Deductible Amounts) **Depreciation * Unearned rent (c) Description/Account Income Tax Expense ($130,000 - $4,000 + $10,000) Deferred Tax Liability [$10,000 × 0.40] Income Tax Payable ($325,000 × 0.40) Deferred Tax Asset...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern