Income amounts before depreciation expense

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Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2011 through 2014 except for differences in depreciation on an operational asset. The asset cost $120,000 and is depreciated for income tax purposes in the following amounts:
The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes.
Income amounts before depreciation expense and income taxes for each of the four years were as follows.
Assume the average and marginal income tax rate for 2011 and 2012 was 30%; however, during 2012 tax legislation was passed to raise the tax rate to 40% beginning in 2013. The 40% rate remained in effect through the years 2013 and 2014. Both the accounting and income tax periods end December 31.

Required:

Prepare the journal entries to record income taxes for the years 2011 through 2014.

Reference no: EM131003581

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