Reference no: EM133169462

Question - The following information is available for Mckee plc for 2022.

1. Excess of tax depreciation over book depreciation, $40,000. This $40,000 difference will reverse equally over the years 2023-2026.

2. Deferral, for book purposes, of $25,000 of rent received in advance. The rent will be recorded as revenue in 2023.

3. Pretax financial income, 350,000. There are no deferred taxes at the beginning of 2022.

4. Tax rate for all years, 40%.

Required -

a. Compute taxable income for 2022.

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

c. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2023, assuming taxable income of $325,000.