Question

G corp. began operations in January x1. At the end of the first year G reported $340,000 income before
     taxes as financial income. However, they reported $320,000 as taxable income. The $20,000 difference is
     due to their use of the accrual method for certain sales for financial reporting purposes and the use of the
     installment sale method for those sales for tax purposes.

    The marginal tax rate is 34%.

A. Record the journal entry to record income tax expense.
B.   What is the amount of the income tax payable?
C. What is the amount of the deferred tax liability?
D. What is the amount of the deferred tax asset?
E.   What is the amount of the deferred income tax expense?
F.   What is the amount of the current portion of the income tax expense?
G. What is the amount of the income tax expense?

Answer 1

	Tax basis	Account basis	Temporary difference
Income	$           3,20,000	$          3,40,000	$                        20,000
Tax rate	34%	34%	34%
Current tax	$           1,08,800
Tax as per books		$          1,15,600
DTL			$                          6,800

	Paticulars	Debit/Credit	Amount
A	Current Tax A/c	Debit	$          1,08,800
Deferred Tax A/c	Debit	$                6,800
Profit & Loss A/c	Credit	$          1,15,600

B	Amount of Income tax payable is
Current tax i.e. $108,800
C	Amount of Deferred tax liability is
$6,800
D	Amount of Deferred tax asset is
NIL
E	Amount of Deferred tax expense is
$6,800
F	Current portion of Income tax is
Current tax i.e. $108,800
G	Amount of Income tax expense is
$ 115,600

Please Like the solution if satisfied with the answer and if any query please mention it in comments...thanks