contestada

A company reports pretax accounting income of $10 million, but because of a single temporary difference, taxable income is $12 million. No temporary differences existed at the beginning of the year, and the tax rate is 40%. Prepare the appropriate journal entry to record income taxes.

Respuesta :

Nyctalus

Answer: Journal entry :-

Income tax expense A/C Dr. $4,000,000

Deferred tax asset A/C Dr.    $800,000

     To income tax payable     $4,800,000

Explanation: Above figures are computed as follows :-

Income tax expense = (10 million) * (40%) =   $4,000,000

Deferred tax asset =   (12 million - 10 million) * (40%) =  $800,000

Income tax payable = (12 million) * (40%) = $4,800,000

Otras preguntas

Q&A Education