Question

6:31 @ . Indigo Corporation has one temporary difference at the end of 2020 that will reverse and cause taxable amounts of $49.800 in 2021. $54.700 in 2022, and $59,300 in 2023. Indigo's pretax financial income for 2020 is $285,000, and the tax rate is 30% for all years There are no deferred taxes at the beginning of 2020 Compute taxable income and income taxes payable for 2020 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. (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 for the amounts.) wand DES Prepare the income tax expense section of the income statement for 2020, beginning with the line"Income before income taxes." (Enter negative amounts using either a negative sign preceding the number eg. -45 or parentheses e..(451) indow Solo

Answer 1

1
Total temporary difference	163800	=49800+54700+59300
Taxable income	121200	=285000-163800
X Tax rate	30%
Income taxes payable	36360
2
Account Titles and Explanation	Debit	Credit
Income tax expense	85500
Deferred tax liability		49140	=163800*30%
Income taxes payable		36360
3
Income statement
For the year ended December 31, 2020
Income before income taxes		285000
Income tax expense
Current	36360
Deferred	49140
		85500
Net income/(loss)		199500