Prepare the journal entry to record the taxes

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Question: In the first year of operations (2020), S.B. Company had pretax accounting income of $1,180,000 and a tax rate of 20%. S.B. incurred a fine of $20,000 for violating clean water law. In 2020, S.B. had installment sales income of $2,400,00 which is expected to be collected evenly over the next two years. S.B. also incurred a litigation expense of $3,000,000, which is expected to be deducted when paid in 2022.

Compute the amounts below. Round to the nearest dollar for all answer.

Required: - Prepare the journal entry to record S.B. 2020 income taxes.

- The deferred tax amount reported in the balance sheet is _______

Reference no: EM132761468

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