Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this...

Transcribed Image Text:

Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense Prepare the income tax entry or entries. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 20X8 Income tax expense Deferred income tax asset Income tax payable 138,600 2 20X8 Income tax payable Income tax expense Sol Limited. reported earnings of $550,000 in 20X8. The company has $95,000 of depreciation expense this year, and claimed CCA of $150,000. The tax rate was 28%. At the end of 20X7, there was a $130,000 loss carryforward that was not recorded because use was considered less than probable. The company also reported a deferred tax liability of $75,000 caused by capital assets with a net book value of $1,350,000 and UCC of $1,050,000. The tax rate had been 20% in 20X7. Required: What is the amount of income tax expense in 20X8? Tax expense Prepare the income tax entry or entries. View transaction list View journal entry worksheet No Date General Journal Debit Credit 1 20X8 Income tax expense Deferred income tax asset Income tax payable 138,600 2 20X8 Income tax payable Income tax expense

Answer rating: 100% (QA)

To calculate the income tax expense for 20X8 we need to determine the taxable income which is the ea... View the full answer