a. Compute the amount of pretax financial income for 2017.

b. Prepare the journal entry record income tax expense, deferred expense income taxes, and income taxes payable for 2017.

Prepare the income tax expense section of the income statement for 2017, beginning for the line "Income before income taxes".

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The following facts relate to Wildhorse Corporation. 1. Deferred tax liability, January 1, 2017, $66,600. 2. Deferred tax asset, January 1, 2017, $22,200. 3. Taxable income for 2017, $116,550. 4. Cumulative temporary difference at December 31, 2017, giving rise to future taxable amounts, $255,300. 5. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $105,450. 6. Tax rate for all years, 40%. No permanent differences exist. 7. The company is expected to operate profitably in the future. The following facts relate to Wildhorse Corporation. 1. Deferred tax liability, January 1, 2017, $66,600. 2. Deferred tax asset, January 1, 2017, $22,200. 3. Taxable income for 2017, $116,550. 4. Cumulative temporary difference at December 31, 2017, giving rise to future taxable amounts, $255,300. 5. Cumulative temporary difference at December 31, 2017, giving rise to future deductible amounts, $105,450. 6. Tax rate for all years, 40%. No permanent differences exist. 7. The company is expected to operate profitably in the future.

Answer rating: 100% (QA)

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