Accounting for corporate income tax [10-15 min]
The income statement of Jennifer’s Cards, Inc., reported income before income tax of $400,000,000 during a recent year. Assume Jennifer’s taxable income for the year was $342,000,000. The company’s income tax rate was 35.0%.
Requirements
1. Journalize Jennifer’s entry to record income tax expense for the year.
2. Show how Jennifer’s would report income tax expense on its income statement and income tax liabilities on its balance sheet. Complete the income statement, starting with income before tax. For the balance sheet, assume all beginning balances were zero.
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