See attached file.
E19-3 One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes
Bandung Corporation began 2007 with a $92,000 balance in the Deferred Tax Liability account. At the end of 2007, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2007 is $525,000, the tax rate for all years is 40%, and taxable income for 2007 is $405,000.
(a) Compute income taxes payable for 2007.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2007.
(c) Prepare the income tax expense section of the income statement for 2007 beginning with the line "Income before income taxes."
Using an Excel 97-2003 worksheet, this solution demonstrates how to compute taxable income when temporary and permanent differences exist, and journalize and present current and deferred income taxes.
Accounting Practices Related to Financial Statements, Account Liquidation and Journalizing
Working on assignment related to financial statements, account liquidation, and journal elimination. Sample questions on the material can be found as attached. Need assistance in understanding the underlying concepts and examples that will help complete the questions.View Full Posting Details