E 16-1 Temporary difference; taxable income given (cont.) 18. Using your answers from the previous question show the appropriate journal entry: 81,250 A. Income tax expense (to balance) Deferred tax liability 81,250 81,250 B. Income tax expense (to balance) 37,500 Deferred tax liability 43,750 Income tax payable C. Income tax expense (to balance) Deferred tax liability 81,250 43,750 Income tax payable 37,500 D. Deferred tax liability 37,500 Income tax payable 43,750 Income tax expense (to balance) 81,250 E 16-1 Temporary difference; taxable income given Alvis Corporation reports pretax accounting income of $325,000, but due to a single temporary difference, taxable income is only $175,000. At the beginning of the year, no temporary differences existed. Required: 17. Assuming a tax rate of 25%, what will be Tax payable, DTL end. Balance, DTL change and Tax Expense plug? A. Step 1: Tax payable: $37,500; Step 2: DTL end. bal: $43,750 Step 3: DTL change: $43,750; Step 4: Tax exp. plug: $81,250 B. Step 1: Tax payable: $43,750; Step 2: DTL end. bal: $37,500 Step 3: DTL change: $37,500; Step 4: Tax exp. plug: $81,250 C. Step 1: Tax payable: $81,250; Step 2: DTL end. bal: $37,500 Step 3: DTL change: $37,500; Step 4: Tax exp. plug: $43,750 D. Step 1: Tax payable: $43,750; Step 2: DTL end. bal: $81,250 Step 3: DTL change: $81,250; Step 4: Tax exp. plug: $37,500