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-S | : Cengage cengageNowe I onlin x e chegg study | Guided solut v O v2 cen a eno .com im take Assi nment takeAssignmentMain ohn okerass nments&takeAss; nent ess on catoraassi nment take&mpro; ress-fm Module 4 Assignment eBook Calculator Future Deductible Amount Chart of Accounts General Journal Labels Balance 2. Ex.18-05 3. Ex. 18-12 4. Pr. 18-01 5. Pr.18-14. Algo Instructions Pito Company has been in operation for several years. During those years, the company has been profitable and it expects to continue to be profitable in the foreseeable future. At the beginning of 2016, Pito has a deferred tax asset of $360 pertaining to one future deductible amount. During 2016, Pito earned taxable income of SS 1,000 which was taxed at rate of 30% (no change in the tax rate has been enacted for future years). At the end of 2016, the book value of the current liability to which the deferred tax asset relates for financial reporting purposes exceeded the book value for income tax purposes by $6,000. Required 1. Prepare Pito's Income tax journal entry at the end of 2016. 2. Show how the deferred tox osset is reported on Pito's December 31, 2016, balance sheet. Check My Work Previous Next Progress: 215 Items 3:36 PM O Type here to search De-w P0 @ 41) 12/16/2017Explanation / Answer
income tax expense - current= taxable income *taxrate= 51000 *30%= 15300
deferred tax:
total future deductible amount= 6000
income tax portion = 6000*30%= 1800
deferred tax asset should be 1800 at the end of the year, since at the beginning there is opening balance of 360
the balance 1800-360= 1440 will be recognised as tax benefit- deferred
Total income tax expense= 15300-1440= 13860
entry:
presentation:
Non-current assets:
Deferred tax asset -1800
Current liabilities:
Income taxes payable -15300
code Account Debit Credit 160 Deferred tax asset 1440 910 Income tax expense 13860 261 Income taxes payable 15300Related Questions
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