Question

Problem 14-30 (LO. 1, 4) Relix, Inc net deferre fomestic corporation with the following balance sheet for book and tax purposes at the end of the year before recording any sset or net deferred tax liability. Tax Debit/Credit) Book Debit/(Credit) Assets Cash $500 $500 Accounts receivable 8,000 8,000 750,000 750,000 Buildings Accumulated depreciation (450,000) (380,000) Furniture and fixtures 70,000 70,000 (46,000) Accumulated depreciation (38,000) Total assets $332,500 $410,500 Liabilities SO ($50,000) Accrued litigation expense Note payable (78,000) ($78,000) (78,000) ($128,000) Total liabilities Stockholders' Equity Paid-in capital ($10,000) ($10,000) Retained earnings (244,500) (272,500) Total liabilities and stockholders' equity ($332,500) ($410,500) The partial beginning of the year tax and book balance sheet information is provided below. Complete the table and determine the Relix's deferred tax benefit or expense for the year. Assume a 21% Federal corporate tax rate and no valuation allowance. Net Book Value Tax Adjusted Basis Temporary Difference Combined Tax Rate Deferred Tax Asset/(Liability) Accumulated depreciation-Building $360,000 $417.000 57,000 21% 11.970 31,000 Accumulated depreciation-Furniture & fixtures 35,200 4,200 21% 882

the debit and credit. thank you

Answer 1

Date	Description	Post Ref	Debit $	Credit $
	Income Tax expense ( provision )		7,140
	Deferred Tax liability			7,140
	(34,000 x 21% )

Answer 2

the entry is for $168. This is the beginning of the year for $5,712, and the previous question we determined the END of year balance to be 5,880. Thus, we make the entry for $168 to bring our beginning balance of $5712, to $5880 for end of year.