A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journa

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A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journa

A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%.

Prepare the appropriate journal entry to record income taxes.

Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5).

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Answer 1

Answer #1

Record income tax expense

Dr. Income tax expense 13.0-0.5 12.5

dr. Deferred tax asset (50-52)*25% 0.5 (-0.5)

Cr. Income tax payable 52*25% 13.0

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Answer 2

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A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journa

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A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journa

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A company reports pretax accounting income of $50 million, but because of a single temporary difference, taxable income is $52 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%. Prepare the appropriate journa