Single Temporary Difference: Multiple Rates At the end of 2013. Fulhage Company reported taxable income of $9.000 and pretax financial income of $10,600. The difference is due to depreciation for tax purposes in excess of depreciation for financial reporting purposes. The income tax rate for the current year is 40%, but Congress has enacted tax rates of 35% for 2014 and 30% for 2015 and beyond.

Fulhage has calculated the excess of its financial depreciation over its tax depreciation for future years as follows: 2014, $600: 2015, $700; and 2016, $300. Prior to 2013, the company had no deferred tax liability or asset.

Required:

Prepare Fulhage's income tax journal entry at the end of 2013.

Answer rating: 100% (QA)

FCs taxable income at the end of 2013 is 9000 and its pre... View the full answer