During 2016, Botto Heights Corp.'s income statement reported income of $420,000 before tax. The company's income tax

Question:

During 2016, Botto Heights Corp.'s income statement reported income of $420,000 before tax. The company's income tax return filed with the IRS showed taxable income of $390,000. During 2016, Botto Heights was subject to an income tax rate of 40%.
Requirements
1. Journalize Botto Heights' income taxes for 2016.
2. How much income tax did Botto Heights have to pay for the year 2016?
3. At the beginning of 2016, Botto Heights' balance of Deferred Tax LiabiUty was $37,000. How much Deferred Tax Liability did Botto Heights report on its at December 31, 2016?
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...