The accounting records of Dwter Minerals Corporation provide income statement data for 2008.

Total expenses include depreciation of \(\$ 50,000\) computed under the straight-line method. In calculating taxable income on the tax return, Dwyer uses MAC.RS. MAC.RS depreciation was \(\$ 70,000\) for 2008. The corporate income tax rate is \(35 \%\).

Requirements 

1. Compute Dwyer's taxable income for the year. For this computation, substitute MACRS depreciation expense in place of straight-line depreciation.

2. Journalize the corporation's income tax for 2008.

3. Show how to report the two income tax liabilities on Dwyer's classiwww.MyAccountingLab.com fied balance sheet. 

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Total revenue...... $680,000 Total expenses 460,000 Income before tax........ $220,000