Ayayai Corporation began operations in 2020 and reported pretax financial income of $230,000 for the year. Ayayai’s tax depreciation exceeded its book depreciation by $47,000. Ayayai’s tax rate for 2020 and years thereafter is 30%. Assume this is the only difference between Ayayai’s pretax financial income and taxable income.Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. Show how the deferred tax liability will be classified on the December 31, 2020, balance sheet.
Ayayai Corporation began operations in 2020 and reported pretax financial income of $230,000 for the year. Ayayai’s tax depreciation exceeded its book depreciation by $47,000. Ayayai’s tax rate for 2020 and years thereafter is 30%. Assume this is the only difference between Ayayai’s pretax financial income and taxable income.Prepare the journal entry to record the income tax expense, deferred income taxes, and income taxes payable. Show how the deferred tax liability will be classified on the December 31, 2020, balance sheet.
Chapter14: Taxes On The Financial Statements
Section: Chapter Questions
Problem 20CE
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Ayayai Corporation began operations in 2020 and reported pretax financial income of $230,000 for the year. Ayayai’s tax depreciation exceeded its book depreciation by $47,000. Ayayai’s tax rate for 2020 and years thereafter is 30%. Assume this is the only difference between Ayayai’s pretax financial income and taxable income.
Prepare the
Show how the
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT