What should Bat record as its income tax payable

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Question - The books of Bat company for the year ended December 31, 2007, showed pretax financial income of $550,000. In calculating the taxable income for income tax purposes, the following temporary differences must be taken into account:

-Depreciation deducted for tax purposes in excess of depreciation recorded on the books (this will reverse evenly during the next two years): $46,000

-Income from cash received from rent for tax purposes in excess of rent revenue recognized on the books (this will reverse next year): $32,000

Income tax rates are 40% in 2007, 40% in 2008, and 35% in 2009. Bat uses the liability method to account for deferred tax items. Bat did not pay any tax during 2007. What should Bat record as its income tax payable at December 31, 2007?

Reference no: EM132894861

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