At the beginning of the current fiscal year, Vation Corporation had a deferred income tax liability balance
Question:
At the beginning of the current fiscal year, Vation Corporation had a deferred income tax liability balance of $15,000, which relates to depreciable assets. During the year, Vation reported the following information:
■ Income before income taxes for the year was $550,000 and the tax rate was 30%.
■ Depreciation expense was $45,000 and capital cost allowance was $30,000.
■ Unearned rent revenue was reported at $40,000. Rent revenue is taxable when the cash is received. There was no opening balance in the unearned rent revenue account at the beginning of the year.
■ No other items affected deferred tax amounts other than these transactions.
Required:
Prepare the journal entry or entries to record income taxes for the year.
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