Ayayai Inc. had accounting income of $150,000 in 2020. Included in the calculation of that amount is the CEO’s life insurance expense of $4,000, which is not deductible for tax purposes. In addition, the undepreciated capital cost (UCC) for tax purposes is $12,000 lower than the net carrying amount of the property, plant, and equipment, although the amounts were equal at the beginning of the year. 

Prepare Ayayai’s journal entry to record 2020 income tax. Assume a tax rate of 25% and that Ayayai uses the taxes payable method of accounting for income taxes under ASPE. 

Answer rating: 100% (QA)

Income tax expenses 150000 25 37500 Income tax payable 150000 ... View the full answer