Reference no: EM132430528

Question - Swifty Corporation began 2020 with a $38,640 balance in the Deferred Tax Liability account. At the end of 2020, the related cumulative temporary difference amounts to $294,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2020 is $441,000, the tax rate for all years is 20%, and taxable income for 2020 is $340,200.

Required -

a) Compute income taxes payable for 2020.

b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable 2020.

c) Prepare the income tax expense sections of the income statement for 2020 beginning with the line "income before income taxes".