Memphis Ltd. is a private corporation reporting under ASPE. It has recorded all necessary adjusting entries, except for income tax expense, at its fiscal year end October 31, 2014. The following information has been taken from the adjusted trial balance:

All accounts have normal balances and total assets equal $736,025. Memphis has a 20% income tax rate.
Instructions
(a) Record the entry to adjust income tax expense and prepare a multiple-step income statement for the year.
(b) Prepare a statement of retained earnings for the year.
(c) Prepare closing entries.
(d) Post the closing entries to the Income Summary and Retained Earnings accounts and compare with the financial statements.
Taking It Further
Why is the entry to adjust income tax expense usually the last adjusting entry prepared each year?

Accounts payable Cash dividends-common Common shares Depreciation expense Dividends payable Income tax expense Income tax payable Insurance expense S 15,800 80,000 100,000 34,375 20,000 25,000 2,500 6,900 Interest expense Notes payable Rent expense Retained earnings (Nov. 1, 2013) Salaries expense Service revenue Unearned revenue $ 4,500 75,000 28,800 430,000 195,000 445,000 22,300