Exercise 19-11 $59,900 49,400 38,000 28,500 $175,800 Account Titles and Explanat

Question

Exercise 19-11

$59,900

49,400

38,000

28,500

$175,800

Account Titles and Explanation

Debit

Credit

Account Titles and Explanation

Debit

Credit

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Exercise 19-11

At the end of 2016, Wildhorse Company has $175,800 of cumulative temporary differences that will result in reporting the following future taxable amounts.
2017

$59,900

2018

49,400

2019

38,000

2020

28,500

$175,800

Tax rates enacted as of the beginning of 2015 are:
2015 and 2016 40 % 2017 and 2018 30 % 2019 and later 25 %
Wildhorse’s taxable income for 2016 is $305,100. Taxable income is expected in all future years.

(a) Prepare the journal entry for Wildhorse to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there were no deferred taxes at the end of 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

(b) Prepare the journal entry for Wildhorse to record income taxes payable, deferred income taxes, and income tax expense for 2016, assuming that there was a balance of $21,300 in a Deferred Tax Liability account at the end of 2015. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Account Titles and Explanation

Debit

Credit

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Explanation / Answer

a) Assuming there were no deferred tax at end of 2015 :-

Journal Entry :-

Working Note :-

b) Deferred Tax Expenses :-

Journal Entry :-

Particulars Amount($) Deferred Tax Liability at end of 2016 (Working Note) 49415 Less : Deferred Tax Liability at end of 2015 0 Deferred Tax Expenses 49415

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