The company had sales for the year of $200,000. Expenses (except for income taxes) for the year

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The company had sales for the year of $200,000. Expenses (except for income taxes) for the year totaled $170,000. Of this $170,000 in expenses, $12,000 is bad debt expense. The tax rules applicable to this company stipulate that bad debts are not tax deductible until the accounts are actually written off. None of the accounts were written off this year but are expected to be written off next year or the following year. The tax rate is 30% this year and in all future years. Make all journal entries necessary to record income tax expense for the year. Assume that the company has been profitable and is expected to be profitable in the future.


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Intermediate Accounting

ISBN: 978-0324592375

17th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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