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In: Accounting

White Inc. had the following amounts that may or may not affect taxable income: Deferred rent...

White Inc. had the following amounts that may or may not affect taxable income:

Deferred rent revenue…………………………………………$25,000

Macrs depreciation in excess of book..…………………..20,000

Interest income from municipal bonds…………………..20,000

Accrued warranty expense……………………………………..25,000

Accrued interest income earned on deposits.…………10,000

Prepaid insurance paid 12/20/2019……………………… 10,000

Taxable income is $200,000 and the tax rate for 2019 is 40%

Required:

1.Prepare a schedule to compute pretax accounting income.

2. Prepare the appropriate journal entry to record 2019 income tax expense.

3. Assume that on January 1, 2019 the Deferred tax asset account had a balance of $10,000. Prepare the appropriate journal entry to record 2019 income tax expense if taxable income was $200,000 and the 2019 tax rate was 40%.

Expert Solution

1.2.

3.

ekkarill92 answered 2 years ago

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