At the beginning of 2017, Newton Corporation had a Deferred Tax Liability account with a beginning balance
Question:
At the beginning of 2017, Newton Corporation had a Deferred Tax Liability account with a beginning balance of $23,500. This was due to $55,600 of temporary differences that will result in future taxable amounts.
At the end of 2017, Newton Corporation had $184,000 of future taxable amounts.
Newton’s taxable income for 2017 is $330,000. Taxable income is expected in all future years.
The enacted tax rate for 2016 and all future years is 40%
a. Prepare the journal entry for Newton to record income taxes payable, deferred income taxes, and income tax expense for 2017.
b. What was Newton’s Book Income Before Taxes assuming they only had the above temporary differences and had a fine in 2017 from the government of $27,000.
Financial Reporting and Analysis
ISBN: 978-1259722653
7th edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer