Question: Do not attempt if you are not sure. Deferred tax liability, January 1, 2015, $80,000 Deferred tax asset, January 1, 2015, $0 Taxable income for

Do not attempt if you are not sure.

Deferred tax liability, January 1, 2015, $80,000

Deferred tax asset, January 1, 2015, $0

Taxable income for 2015, $230,000

Pretax financial income for 2015, $400,000

Cumulative temporary difference at December 31, 2015, giving rise to future taxable amounts, $440,000

Cumulative temporary difference at December 31, 2015, giving rise to future deductible amounts, $70, 000

Tax rate for all years, 40%

The company is expected to operate profitably in the future.

Instructions: Compute income taxes payable for 2020. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2020. Prepare the income tax expense section of the income statement for 2020

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