Solution-Income before income taxes

Income before income taxes

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Reference no: EM131171111

The pretax financial income of Truttman Company differs from its taxable income throughout each of 4 years as follows.

Year	Pretax Financial Income	Taxable Income	Tax Rate
2014	$291,300	$188,700	36	%
2015	325,800	225,900	42	%
2016	350,900	261,500	42	%
2017	427,700	564,000	42	%

Pretax financial income for each year includes a nondeductible expense of $30,400 (never deductible for tax purposes). The remainder of the difference between pretax financial income and taxable income in each period is due to one depreciation temporary difference. No deferred income taxes existed at the beginning of 2014.
Prepare journal entries to record income taxes in all 4 years. Assume that the change in the tax rate to 42% was not enacted until the beginning of 2015
Prepare the income statement for 2015, beginning with income before income taxes.

Reference no: EM131171111

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Income before income taxes

Reference no: EM131171111

Reference no: EM131171111

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