Prepare appropriate journal entry for b to record income tax

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Question - B Inc., reports bad debt expense using the allowance method. For tax purposes the direct writeoff method is used. At the end of the current year, B has accounts receivable and an allowance for uncollectible accounts of $5,000,000 and $200,000, respectively, and taxable income of $20,000,000. At the end of the previous year, B reported a deferred tax asset of $80,000 related to the difference in reporting bad debts, its only temporary difference. The enacted tax rate is 30% each year.

Required: Prepare the appropriate journal entry for B to record the income tax provision for the current year. Show well-labeled supporting computations.

Reference no: EM131928196

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