Prepare the journal entries to record income taxes

Reference no: EM132089005

Question: Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2013 through 2016 except for differences in depreciation on an operational asset. The asset cost $150,000 and is depreciated for income tax purposes in the following amounts: 2013 $ 49,500 2014 66,000 2015 22,500 2016 12,000 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. 2013 2014 2015 2016 Accounting income before taxes and depreciation $2013 85,000 $ 2014 105,000 $ 2015 95,000 $ 2016 95,000 Assume the average and marginal income tax rate for 2013 and 2014 was 30%; however, during 2014 tax legislation was passed to raise the tax rate to 40% beginning in 2015. The 40% rate remained in effect through the years 2015 and 2016. Both the accounting and income tax periods end December 31.

Required: Prepare the journal entries to record income taxes for the years 2013 through 2016. (If no entry is required for a particular transaction, select "No journal entry required" in the first account field.) 4 journey entries are required

Reference no: EM132089005

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