As of December 31, 2015, its first year in business, Kukui Company had taxable temporary differences totaling

Question:

As of December 31, 2015, its first year in business, Kukui Company had taxable temporary differences totaling $110,000. Of this total, $45,000 relates to current items. Kukui also had deductible temporary differences totaling $42,000, $14,000 of which relates to current items. Pretax financial income for the year was $200,000. The enacted tax rate for 2015 and all future years is 35%.

Instructions:

1. Prepare the journal entries to record income taxes for 2015.

2. Repeat (1), but assume that all the taxable temporary differences are noncurrent and that all the deductible temporary differences are current.

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Intermediate Accounting

ISBN: 978-1133957911

19th edition

Authors: Earl K. Stice, James D. Stice

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