Worm company had 2007 taxable income of 60000 which

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Reference no: EM13611014

WORM Company had 2007 taxable income of $60,000 which included the following: Bad debt expense (allowance for financial, direct write-off for tax) difference of $6,000 Depreciation (straight-line for financial, MACRS for tax, first year) difference of $14,000 Fines of $5,000 Net operating loss carried forward from 2004 of $20,000 Installment sales (accrual basis for financial, installment basis for tax, year of sale) $24,000 difference Rent received in 2007 to be earned in 2008 $9,000 (none received in 2006 and earned in 2007).

[a] Calculate pretax financial income

[b] What is the journal entry to record income tax expense and income tax payable for 2007? Ignore estimated tax payments and underpayment penalties.

Reference no: EM13611014

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