How to record income tax expense with a journal entry

Asked by admin @ 10/11/2021 in Business viewed by 352 People

Culver Company has the following two temporary differences between its income tax expense and income taxes payable.

2020 2021 2022
Pretax financial income $873,000 $866,000 $947,000
Excess depreciation expense on tax return (29,400 ) (39,000 ) (9,600 )
Excess warranty expense in financial income 20,000 9,900 8,300
Taxable income $863,600 $836,900 $945,700
The income tax rate for all years is 20%.
Assuming there were no temporary differences prior to 2020, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020, 2021, and 2022.

Answered by admin @ 10/11/2021

Answer:

Journal entries

Explanation:

The journal entries are as follows

For 2020

Income tax expense $174,600

Deferred tax asset $4,000 ($20,000 × 20%)

To Income tax payable $172,720 ($863,600 × 20%)

To Deferred tax liability $5,880 ($29,400 × 20%)

(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)

For 2021

Income tax expense $173,200

Deferred tax asset $1,980 ($9,900 × 20%)

To Income tax payable $167,380 ($836,900 × 20%)

To Deferred tax liability $7,800 ($39,000 × 20%)

(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)

For 2020

Income tax expense $174,600

Deferred tax asset $1,660 ($8,300 × 20%)

To Income tax payable $189,140 ($945,700 × 20%)

To Deferred tax liability $1,920 ($9,600 × 20%)

(Being the income tax expense, deferred income taxes, and income taxes payable is recorded)

Able, baker, and charles are engaged in the marketing to and enrollment of beneficiaries into medicare health plans. mr. able is an independent agent paid directly by a health plan. ms. baker is an independent agent paid through a field marketing organization (fmo). mr. charles is an independent agent paid for his work by a third-party marketing organization (tmo). how do the cms compensation rules apply to these three agents?

Asked by maham237 @ 13/01/2021 in Business viewed by 2747 persons

How to record income tax expense with a journal entry

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