Exercise 18-4 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT LINK TO TEXT SHOW

Question

Exercise 18-4

SHOW LIST OF ACCOUNTS

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT

SHOW LIST OF ACCOUNTS

LINK TO TEXT

LINK TO TEXT

LINK TO TEXT

Date

Account Titles and Explanation

Debit

Credit

2017

(To record current tax expense.)

(To record deferred tax expense.)

2018

(To record current tax expense.)

(To record deferred tax expense.)

2019

(To record current tax expense.)

(To record deferred tax expense.)

Exercise 18-4

Culver Corporation reports the following amounts in its first three years of operations.
2017 2018 2019 Taxable income $245,200 $120,400 $125,300 Accounting income 155,400 137,000 133,200
The difference between taxable income and accounting income is due to one reversing difference. The tax rate is 30% for all years and the company expects to continue with profitable operations in the future.

Explanation / Answer

Answer a. Year Amount of Temporary Difference Orginating or Reversing During the Year Deductible Temporary Difference at Year-End 2017 $155,400 - $245,200 = $89,800 Orginating                                    89,800.00 2018 $137,000 - $120,400 = $16,600 Reversing                                    73,200.00 2019 $133,200 - $125,300 = $7,900 Reversing                                    65,300.00 Answer b. Date Future Deductible Amounts Tax Rate Deferred Tax Asset 31-Dec-17                                                                  89,800.00 30%                            26,940.00 31-Dec-18                                                                  73,200.00 30%                            21,960.00 31-Dec-19                                                                  65,300.00 30%                            19,590.00 Answer c. Journal Entry Date Particulars Dr. Amt. Cr. Amt. 2017 Current Tax Expense      73,560.00 $245,200 X 30%    Income Tax Payable    73,560.00 (To record current tax expense) 2017 Deferred Tax Asset      26,940.00 $89,800 X 30%    Deferred Tax Benefit    26,940.00 (To record deferred tax expense) 2018 Current Tax Expense      36,120.00 $120,400 X 30%    Income Tax Payable    36,120.00 (To record current tax expense) 2018 Deferred Tax Expense        4,980.00 $21,960 - $26,940    Deferred Tax Asset      4,980.00 (To record deferred tax expense) 2019 Current Tax Expense      37,590.00 $125,300 X 30%    Income Tax Payable    37,590.00 (To record current tax expense) 2019 Deferred Tax Expense        2,370.00 $19,590 - $21690    Deferred Tax Asset      2,370.00 (To record deferred tax expense)

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.