Question

In: Accounting

Smyrna Company had financial and taxable incomes as follows: 2016                     2017              

  1. Smyrna Company had financial and taxable incomes as follows:

2016                     2017                     2018

Pretax financial income                                             $150,000             $140,000            $135,000

Taxable income                                                              115,000             140,000               170,000

The tax rate for all three years was 30%.

Required:

a. Prepare the journal entries to record income taxes for all three years.

b. Explain why the taxes paid in 2018 are different from the tax return and the amount reported in the financial statements and provide an example of what could cause this difference.

ANSWER:  

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Expert Solution

ekkarill92 answered 2 years ago
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