You are the Chief Accounting Officer for your family’s business, RB Johnson Aviation Company (the Company). The Company, which files its income tax returns as a C Corporation, is engaged in the purchase and sale of aviation related parts and supplies in Virginia. Moss Adams has just completed its annual audit of the Company for the year ended December 31, 2022. 

The Company’s 2022 trial balance prior to the Company’s 2022 tax entry is as follows. Moss Adams has agreed to all of the balances below and has also agreed to the other information provided.

Company
Trial Balance
12.31.22
	Debits	Credits
Cash	125,000.00
Accounts Receivables	400,000.00
Allowance for Doubtful Accounts		25,000.00
Inventories	75,000.00
Advance to Shareholders	10,000.00
Buildings and Other Depreciable Assets	575,000.00
Accumulated Depreciation		355,000.00
Land	10,000.00
Goodwill	95,000.00
Accumulated Amortization		5,000.00
Accounts Payable		17,000.00
Note Payable Bank Current Portion
Note Payable Bank Long-term Portion		150,000.00
Unpaid Wages		65,000.00
Federal Taxes Payable
State Taxes Payable
Deferred Income Tax Liability		6,000.00
Common Stock		50,000.00
Additional Paid in Capital		100,000.00
Retained Earnings	475,000.00
Sales		8,717,000.00
Expenses	7,700,000.00
Depreciation	15,000.00
Current Income Tax Expense	10,000.00
Deferred Income Tax Expense
	9,490,000.00	9,490,000.00

RB Johnson Aviation Company Trial Balance Additional Information
 The Company’s tax depreciation (federal and Virginia) for 2022 was a total of $17,000.
 Included in the Company’s $7,700,000 of expenses is a non-deductible fine of $10,000.
 There are NO other book tax differences for the year 2022.
 The Company’s Goodwill of $95,000 arose during the current year. Amortization of the goodwill for 2022 was $5,000 and is deductible        for federal and state income tax purposes.
 The Company, during 2022, made estimated tax payments of a total of $10,000, including $7,500 in federal estimates and $2,500 in         state estimates. Both of these payments were recorded in the current income tax expense account.
 Moss Adams has provided you with a deferred income tax liability balance, as of December 31, 2022, of $10,350.
 There were no changes to the Company’s allowance for doubtful accounts during 2022, no write- offs, recoveries, or needed additions to this account.
 The current portion of the long-term bank debt that will be paid during 2023 is $50,000.

Required 

Compute Virginia and Federal taxable income, compute the related taxes, and prepare the necessary journal entry for the Company’s 2022 current and deferred income tax expense.

Answer rating: 100% (QA)

To compute the Virginia and Federal taxable income as well as the related taxes for RB Johnson Aviat... View the full answer