Record frankfort company''s income tax expense.

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Refer to RE19-1. Assume that Frankfort's taxable income for Year 1 is $300,000. Prepare the journal entry to record Frankfort Company's income tax expense.

In RE19-1, Frankfort Company identifies depreciation as the only difference for future taxable amounts. In Year 1, its depreciation for financial reporting purposes is $3,500 and $5,000 for income tax reporting purposes. Frankfort Company has an income tax rate of 35%. Explain whether this is a deferred tax asset or deferred tax liability, and calculate the amount.

Reference no: EM13868891

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