Business
Accounting
For 2010, its first year of operations, Johnson Advertising earned

For 2010, its first year of operations, Johnson Advertising earned pretax accounting income (on the income statement) of $750,000. Taxable

Question:

For 2010, its first year of operations, Johnson Advertising earned pretax accounting income (on the income statement) of $750,000. Taxable income (on the tax return filed with the Internal Revenue Service) is $650,000. The income tax rate is 35%. Record Johnson’s income tax for the year. Show what Johnson will report on its 2010 income statement and balance sheet for this situation. Start the income statement with income before tax.

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...