Compute the amount of pretax financial income

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Reference no: EM132798292

Question - The following facts relate to Swifty Corporation.

1. Deferred tax liability, January 1, 2020, $30,900.

2. Deferred tax asset, January 1, 2020, $10,300.

3. Taxable income for 2020, $108,150.

4. Cumulative temporary difference at December 31, 2020, giving rise to future taxable amounts, $236,900.

5. Cumulative temporary difference at December 31, 2020, giving rise to future deductible amounts, $97,850.

6. Tax rate for all years, 20%. No permanent differences exist.

7. The company is expected to operate profitably in the future.

Required -

1. Compute the amount of pretax financial income for 2020.

2. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020.

Reference no: EM132798292

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