Question

FULL Skysongine, in CALCULATO A LEHYSIO first year of operations, has the following differences between the book basis and tax basis of its assets and tabeties at the end of 2016 Hook masis Tax Basis $340,000 Equimentet 399.000 $191.000 p h asable It is estimated that the warranty Baby will be dis 2017. The rece income of $548,000 in 2016. As of the beginning of 2016, the enacted texte is t (net) will result in toate amounts of $20,000 in 2017. $27,800 in 2015, and $10,300 in 2019. The c for 2016-2018, and for 2019 Siyong expects to report taxable income through 2019 Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016. (Credit account titles are automatically indeed when amount is entered the mot indent a lly. If moetry is required, select "Ne Entry for the account titles and enter for the amounts.) Account Titles and plana

Answer 1

Skysong Inc. 2017 2018 2019 Total Journal Enteries Trans, Particulars a. Income Tax Expense a/c Dr. Deferred Tax Asset a/c Dr. To Income Taxes Payable To Deferred Tax Liability Debit in $ Credit in $ 141028 64940 186320 19648 27800 10300 Future taxable (deductible) amounts Depreciation Warranty costs Enacted tax rate Deferred tax liability 59000 -191000 20900 -191000 34% 7106 -64940 34% 9452 30% 3090 19648 -64940 b. Non-current assets Deferred tax asset($64,940 - $19,648) 45292 Taxable income for 2016 Tax rate Income taxes payable for 2016 548000 34% 186320 19648 Deferred tax liability at the end of 2016 Deferred tax liability at the beginning of 2016 Deferred tax expense for 2016 (increase required in deferred tax liability account) 19648 64940 Deferred tax asset at the end of 2016 Deferred tax asset at the beginning of 2016 Deferred tax benefit for 2016 (increase in deferred tax asset) -64940 Deferred tax benefit for 2016 Deferred tax expense for 2016 Net deferred tax benefit for 2016 Current tax expense for 2016 Income tax expense for 2016 -64940 19648 -45292 186320 141028