Chapter 19 - Estimated expenses deductible for taxes when...

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Name: __________________________ Problem chapter 19 (a) Future Taxable Amounts 2011 2012 2013 310000 310000 310000 *0.30 *0.30 *0.30 93000 93000 93000 279000 Future Deductable amounts 2011 2012 2013 800000 *0.30 240000 (b) Income Tax Expense 360,000 Deferred Tax asset 240,000 Income tax payable 321,000 Deferred tax liability 279,000 Page 1 1. Deferred income taxes. Lexicon Co. at the end of 2010, its first year of operations, prepared a reconciliation between pretax financial income and taxable income as follows: Pretax financial income $ 1,200,000 Extra depreciation taken for tax purposes (930,000)
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Unformatted text preview: Estimated expenses deductible for taxes when paid 800,000 Taxable income $ 1,070,000 Use of the depreciable assets will result in taxable amounts of $310,000 in each of the next three years. The estimated litigation expenses of $800,000 will be deductible in 2012 when settlement is expected. Instructions (a) Prepare a schedule of future taxable and deductible amounts. (b) Prepare the journal entry to record income tax expense, deferred taxes, and income taxes payable for 2010, assuming a tax rate of 30% for all years....
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