Kraft Company made the following journal entry in late 2025 for rent received on property it...

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Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation: Cash Unearned Rent Revenue 150,000 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. Assuming that income taxes payable at the end of 2026 is $255,000, what amount of income tax expense would Kraft record for 2026? Kraft Company made the following journal entry in late 2025 for rent received on property it leases to Danford Corporation: Cash Unearned Rent Revenue 150,000 150,000 The payment represents rent for the years 2026 and 2027, the period covered by the lease. Kraft is a cash basis taxpayer. Kraft has income tax payable of $230,000 at the end of 2025, and its tax rate is 25%. Assuming that income taxes payable at the end of 2026 is $255,000, what amount of income tax expense would Kraft record for 2026?

Answer rating: 100% (QA)

As Kraft Company is a cash basis taxpayer it recognizes revenue when it receives cash and deducts ex... View the full answer