Prepare income tax expense section of the income statement

Assignment Help Accounting Basics
Reference no: EM133117837

Question - Indigo Inc. has two temporary differences at the end of 2022. The first difference stems from installment sales, and the second one results from the accrual of a loss contingency. Flynn's accounting department has developed a schedule of future taxable and deductible amounts related to these temporary differences as follows.


2023

2024

2025

2026

Taxable amounts

$40,000

$50,000

$60,000

$90,000

Deductible amounts

-

(25,000)

(32,000)

-

As of the beginning of 2022, the enacted tax rate is 34% for 2022 and 2023, and 38% for 2024-2027. At the beginning of 2022, the company had $20,000 balance in deferred tax liability and zero balance in deferred tax assets. Taxable income for 2022 is $400,000. Taxable income is expected in all future years. Pre-tax financial income for 2022 is $246,882.

Required -

a) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022.

b) Prepare the income tax expense section of the income statement for 2022, beginning with the line "Income before income taxes."

Reference no: EM133117837

Questions Cloud

Develop the balanced scorecard for the company : Develop the balanced scorecard for the company - ummarize important design guidelines for improving manufacturability and thus improving quality and reducing
Record the transactions for shoemaker corporation : Record the following transactions for Shoemaker Corporation - The loan of $600,000 and acceptance of the note receivable on April 1, 2021
Describe summary of cost behavior concepts : Describe summary of cost behavior concepts. Describe cost-volume-profit relationships. What is contribution margin ratio? Describe cost behavior
The hard side of change management : Compare and contrast these models with Kotter's 8 Steps to Change. At this point, refrain from personal opinion
Prepare income tax expense section of the income statement : Prepare the income tax expense section of the income statement for 2022, beginning with the line Income before income taxes
Issue of the rising cost of healthcare and insurance : What steps do you think could be taken to help correct the issue of the rising cost of healthcare and insurance?
Whole foods case study : To what extent do you think training and associate learning would be more important for Whole Foods compared to other grocery stores?
Do you have the solution for harvard simulation projects : Do you have the solution for Harvard simulation projects? Project Management Simulation: Scope, Resources, Schedule
Discuss the differences between internal and external users : Discuss the differences between internal and external users of information and their needs and demands on an information system

Reviews

Write a Review

Accounting Basics Questions & Answers

  What is the balance sheet for ps music as of june

What is the balance sheet for PS Music as of June 30, 2019. Give a statement of owner's equity for PS Music for the month ended June 30, 2019.

  Open market as treasury stock pay

Open market as treasury stock pay

  Calculate any incremental gain from the merger

If the two firms merge, there will be a cost saving of US$2 million. Calculate any incremental gain from the merger

  Product launch expected value

Brain Drain is about to launch a new product. Depending on the success of the new product, there are three possible outcomes for value next year-What is Brain's total value with leverage?

  What are relevant costs

What are relevant costs? And what is the danger in allocating common fixed costs among product lines or other segments of an organization

  Prepare the year end adjusting journal entry for bad debt

The bad debts are estimated at 3% of $600,000, the net credit sales. Prepare the year end adjusting journal entry for bad debt expense

  Part b additional information kay corporation reported a

the stockholders equity section of kay corporation at december 31 2005 included the following accountspreferred stock 9

  What inventoriable costs per unit of bhe would be

St. Claire Manufacturing expects to produce and sell 6,000, According to generally accepted accounting principles, inventoriable costs per unit of Bhe would be

  How much difference would there have been

How much difference would there have been in Hemingway's income with regard to the effect of the investment, between using the equity method

  What are the budgeted cash payments for purchases on account

If purchases are budgeted to be $18,000 for October and $19,500 for November, what are the budgeted cash payments for purchases on account for November

  What is the correct cash balance on December

It was determined that check of P200,000 in payment of an equipment was drawn and recorded on December 31, 2018. What is the correct cash balance on December

  Demonstrate awareness of strengths and limitations

Demonstrate awareness of own strengths and limitations as a team member Continuously plan for improvement in use of self in effective team development

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd