The company started business on January 1 and had revenues of $60,000 for the year. In addition
Question:
The company started business on January 1 and had revenues of $60,000 for the year. In addition to income tax expense, the company’s only other expenses are as follows:
Bad debt expense of $10,000. Tax rules do not allow any deduction until the bad debts are actually written off. During the year, bad debts totaling $2,000 were written off.
Postretirement health care benefit expense of $15,000. Tax rules do not allow any deduction until the actual retiree health care expenditures are made. No expenditures were made during the year.
The income tax rate is 35% for the current year and all future years. Assume that the company is more likely than not to be profitable in future years. Prepare the journal entry or entries necessary to record income tax expense for the year.
Step by Step Answer:
Intermediate Accounting
ISBN: 978-0324592375
17th Edition
Authors: James D. Stice, Earl K. Stice, Fred Skousen