Prepare the journal entries to record the income tax expense

Reference no: EM132723708

Carla Corp. sold an investment on an installment basis. The total gain of $62,400 was reported for financial reporting purposes in the period of sale. The company qualifies to use the installment-sales method for tax purposes. The installment period is 3 years; one-third of the sale price is collected in the period of sale. The tax rate was 40% in 2017, and 35% in 2018 and 2019. The 35% tax rate was not enacted in law until 2018. The accounting and tax data for the 3 years is shown below.

Question 1: Calculate cumulative temporary differences for years 2017-2019.

Question 2: Prepare the journal entries to record the income tax expense, deferred income taxes, and the income taxes payable at the end of each year. No deferred income taxes existed at the beginning of 2017.

Question 3: Show how the deferred taxes will appear on the balance sheet at the end of each year.

Question 4: Draft the income tax expense section of the income statement for each year, beginning with "Income before income taxes."

Reference no: EM132723708

Questions Cloud

Prepare cash flow statement for the year ended for mabilis : Prepare cash flow statement (indirect method) for the year ended for Mabilis Delivery Services. Gain on sale of property and equipment - P10,000

Explain statement in context of corporate social responsible : An article entitled 'Business and society in the coming decades', Explain statement in the context of corporate social responsibility.

Find the ending merchandise inventory and cost of goods : Find the ending merchandise inventory and cost of goods sold amounts for the October financial statements using the FIFO, LIFO

Management systems and practices of asian businesses : Discuss what impacts these diversities may have on the management systems and practices of Asian businesses.

Prepare the journal entries to record the income tax expense : Make the journal entries to record the income tax expense, deferred income taxes, and the income taxes payable at the end of each year.

Combination of power base and influence tactic : Pick any two of the five bases of power(legitimate,reward,coercive,referent,expert power) and select an influence tactic(Assertiveness, Ingratiation

Determine the gains or losses are long-term : Determine whether the gains or losses are long-term or short-term . Also determine the net capital gain and adjusted net capital gain for 2018

Explain what is the company visible culture : Explain what is the company's visible culture? How can they use this to build a strong culture?

How culture can impact international business : How culture can impact international business

User Account

All Pages