Question

Exercise 19-01 Blossom 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. Blossom'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. Your answer is correct. Compute taxable income and income taxes payable for 2020. Taxable income 121200 Income taxes payable 36360 SHOW LIST OF ACCOUNTS LINK TO TEXT LINK TO TEXT

I need help finishing the income statement please!

Answer 1

Solution:

Blossom Corporation
Income statement (Partial)
For the Year Ended December 31, 2020
Income before Income Taxes		$             285,000
Income Tax Expense
Deferred	$             49,140
Current	$             36,360
		$               85,500
Net Income / (loss)		$             199,500

1) Income Tax Expense = Deferred Tax + Current Tax = 49,140 + 36,360 = 85,500

2) Net Income = Income before Income Taxes - Income Tax Expense = $ 285,000 - $85,500 = $ 199,500.