Prepare the income tax expense section

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1. (One Temporary Difference, Future Taxable Amounts, One Rate, No Beginning Deferred Taxes) Starfleet Corporation has one temporary difference at the end of 2010 that will reverse and cause taxable amounts of $55,000 in 2011, $60,000 in 2012, and $75,000 in 2013. Starfleet's pretax financial income for 2010 is $400,000, and the tax rate is 30% for all years. There are no deferred taxes at the beginning of 2010.

(a) Compute taxable income and income taxes payable for 2010.

(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2010.

(c) Prepare the income tax expense section of the income statement for 2010, beginning with the line "Income before income taxes." 

Reference no: EM131108606

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