Compute the income tax expense and income tax liability

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2 years ago, Charlotte Corp. purchased a building for $18,000,000. Charlotte uses straight-line depreciation to prepare the financial information but they use MACRS for tax purposes. At December 31, 2013, the building has a book value of $16,000,000 and its tax basis $13,000,000. At December 31, 2014, the book value of the building was $14,000,000 and the tax basis was $9,000,000. There were no other temporary differences or permanent differences. Pretax accounting income for the current year was $23,000,000. A tax rate is 40% ??
Prepare one journal entry to record Charlotte's income tax expense for the current year. Show the computation of income tax expense, income tax liability and deferred tax liability or deferred tax asset.

Reference no: EM13216007

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