The following facts relate to Alschuler Corporation. 1. Deferred tax liability,

Question

The following facts relate to Alschuler Corporation.
1. Deferred tax liability, January 1, 2010, $40,000
2. Deferred tax asset, January 1, 2010, $0
3. Taxable income from 2010, $171,350
4. Pretax financial income for 2010, $339,550
5. Cumulative temporary difference at December 31, 2010, giving rise to future taxable amounts, $327,800
6. Cumulative temporary difference at December 31, 2010, giving rise to future deductible amounts, $59,600
7. Tax rate for all years, 40%
8. The Company is expect to operate profitably in the future.
(a) Compute income taxes payable for 2010 $___________________

(b) prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2010.
(c) prepare the income tax expense section of the income statement for 2010, beginning with the line "income before income taxes"
_________________________________________________________$__________________
income tax expense current $______________
___________________________________$_____________ $________________
________________________________________________________$________________

Explanation / Answer

(a) Compute income taxes payable for 2010 $_67,160___ (b) prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2010. Income summary A/c………Debit 65,120 To Deferred tax liability A/c 65,120 (c) prepare the income tax expense section of the income statement for 2010, beginning with the line "income before income taxes" income tax expense current $______________ ________________________ 198,420___________$_____________ $________________ ________________________________________________________$________________

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