Zekany Corporation would have had identical income before taxes on both its income tax returns and...
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Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $180,000 and is depreciated for income tax purposes in the following amounts: 2021 $59,400 79,200 2022 2023 27,000 2024 14,400 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2021 2022 2023 2024 Accounting income before taxes and depreciation $100,000 $120,000 $110,000 $110,000 Assume the income tax rate for 2021 and 2022 was 30%; however, during 2022, tax legislation was passed to raise the tax rate to 40% beginning in 2023. The 40% rate remained in effect through the years 2023 and 2024. Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2021 through 2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Zekany Corporation would have had identical income before taxes on both its income tax returns and income statements for the years 2021 through 2024 except for differences in depreciation on an operational asset. The asset cost $180,000 and is depreciated for income tax purposes in the following amounts: 2021 $59,400 79,200 2022 2023 27,000 2024 14,400 The operational asset has a four-year life and no residual value. The straight-line method is used for financial reporting purposes. Income amounts before depreciation expense and income taxes for each of the four years were as follows: 2021 2022 2023 2024 Accounting income before taxes and depreciation $100,000 $120,000 $110,000 $110,000 Assume the income tax rate for 2021 and 2022 was 30%; however, during 2022, tax legislation was passed to raise the tax rate to 40% beginning in 2023. The 40% rate remained in effect through the years 2023 and 2024. Both the accounting and income tax periods end December 31. Required: Prepare the journal entries to record income taxes for the years 2021 through 2024. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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Income before taxes and depreciation Years 2013 2014 2015 2016 Years Closing value of assets 2013 45... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-0078025839
9th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
Posted Date:
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