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2019 is the first year of operation for Flitz Company. Applicable tax rates enacted by the...

2019 is the first year of operation for Flitz Company. Applicable tax rates enacted by the end of 2018 are as follows:2019 25%2020 20%2021 and later 30%Compute the amount of deferred taxes to appear on the balance sheet at 12/31/19 with proper classifications, prepare the journal entry to record income tax expense for 2019, and show the current and deferred portions of income tax expense on the income statement for 2019.(a) In 2019 Flitz had pre-tax financial income of $450,000.(b) Pre-tax financial income was different from taxable income due to the following:Depreciation, the straight-line method for financial purpose while MACRS is used for tax purpose 35,000(tax-deductible in 2019, expense in 2020 20,000 in 2021 15,000)Fine for pollution 8,000(not tax-deductible, expense in 2019) Revenue received in advance 14,000(taxable 2019, revenue in 2020)Revenue from investment on equity method for financial purpose and cost method is used for tax purpose 10,000(revenue in 2019, taxable in 2020) Litigation accrual 80,000(expense in 2019, tax-deductible in 2022)Interest received on municipal bonds 6,000(revenue in 2019, not taxable)

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ekkarill92 answered 2 years ago
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