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Starfleet Corporation has one temporary difference at the end of 2012 that will reverse and cause taxable amounts of $56,530 in 2013, $61,910 in 2014, and $80,270 in 2015. Starfleet's pretax financial income for 2012 is $442,490, and the tax rate is 40% for all years. There are no deferred taxes at the beginning of 2012.
(a) Compute taxable income and income taxes payable for 2012.(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2012.
Actual revenues are equal to estimated revenues, and actual expenditures are $7,000 less than appropriations.
Examine the legal liability an accounting professional has, including how a CPA is protected. Differentiate between fraud and negligence.
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