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E19.3 (LOI,2) (One Temporary Difference, Future Taxable Amounts, One Rate, Beginning Deferred Taxes) Brennan Corporation began 2019 with a $90,000 balance in the Deferred Tax Liabil- ity account. At the end of 2019, the related cumulative temporary difference amounts to $350,000, and it will reverse evenly over the next 2 years. Pretax accounting income for 2019 is $525,000, the tax rate for all years is 40%, and taxable income for 2019 is $400,000. Instructions a. Compute income taxes payable for 2019. b. Prepa re the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019. e. Prepare the income tax expense section of the income statement for 2019, beginning with the line Income before income taxes.
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22 a) Compute the Income Tax Payable for 2019 24 25 26 27 28 29 b) 30 31 Taxable Income Enacted Tax Rate Income Tax Payable (400000*40%) 400,000 40% 160,000 Prepare the Journal Entry Future Years 2020 175,000 2021 Total Future Taxable (Deductible) amounts Tax Rate Deferred Tax Liability (Asset) 175,000 40% 70,000 350,000 40% 34 70,000 140,000 35 Deferred Tax Liability at the end of 2019 Less Deferred Tax Liability at the beginning of 2019 Deferred Tax Expense for 2019 Current Tax Expense for 2019 Income Tax Expense for 2019 140,000 90,000 50,000 160,000 210,000 40 4142 43 Income Tax Expense 210,000 Income Tax Payable Deferred Tax Liability To record Income Tax Expense) 160,000 50,000 45 46 47 C 48 49 50 51 52 53 54 Prepare the Income Tax expense section of the Income Statement for 2019 Inome Before Income Taxes Income Tax Expense Current Deferred Net Income 525,000 160,000 50,000 210,000 315,000

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