Question

Question 2 0.25/1 View Policies Show Attempt History Current Attempt in Progress Novak Company reports pretax financial income of $72,600 for 2020. The following items cause taxable income to be different than pretax financial income. 1. Depreciation on the tax return is greater than de preciation on the income statement by $17,200. Rent collected on the tax return is greater than rent recognized on the income statement by $20,300. 2. Fines for pollution appear as an expense of $9,900 on the income statement. 3. Novak's tax rate is 30 % for all years, and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2020. (a) Your answer is correct. Compute taxable income and income taxes payable for 2020 $ Taxable income 85600 $ Income taxes payable 25680 eTextbook and Media List of Accounts Attempts: 1 of 3 used (b) 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 0for the amounts.) Account Titles and Explanation Debit Credit eTextbook and Media

Answer 1

b
Account Titles and Explanation	Debit	Credit
Income tax expense	24750
Deferred Tax Asset	6090		=20300*30%
Income tax payable		25680	=85600*30%
Deferred Tax Liability		5160	=17200*30%