Current Attempt in Progress

During $2025,$ Kate Holmes Co's first year of operations, the company reports pretax financial income at $$250,000.$ Holmes's enacted

tax rate is $45\%$ for $2025$ and $20\%$ for all later years. Holmes expects to have taxable income in each of the next $5$ years. The effects on

future tax returns of temporary differences existing at December $31,2025,$ are summarized as follows.

$($a$)$

V Your answer is correct.

Complete the schedule below to compute deferred taxes at December $31,2025.($Negative amounts using either a negative sign

preceding the number e$.$g$.-45$ or parentheses e$.$g$.(45).)$

B$)$ Compute taxable income for $2025.$

$($c$)$ Prepare the journal entry to record income taxes payable, deferred taxes, and income tax expense for $2025.($List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select $"$No Entry" for the account titles and enter O for the amounts.$)$

Account Titles and Explanation:

Income Tax Expense

Deferred Tax Asset

Deferred Tax Liability

Income Tax Payable