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(Solved) (Latest ver. Aug 2020) - McKane Corporation Deferred Income Tax Expense

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Question:

The following facts relate to McKane Corporation
1. Deferred tax liability, January 1, 2010, $60,000
2.Deferred tax asset January 1, 2010 $20,000
3.Taxable income for 2010, $115,000
4.Cumulative temporary difference at December 31, 2010 giving rise to future
5.Cumulative temporary difference at December 31, 2010 giving rise to $95,000
6.The tax rate for all years 40%. No permanent difference exists
7.The company is expected to operate profitably in the future
Instructions.

A) Compute the amount of pretax financial income for 2010
B)Prepare the journal entry record income tax expense, deferred income payable for 2010

 







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