Purchase Solution

McKane Corporation Deferred Income Tax Expense

Not what you're looking for?

Ask Custom Question

The following facts relate to McKane Corporation
1. Deferred tax liability, January 1, 2010, $60,000
2. Deferred tax asset January 1, 2010 $20,000
3. Taxable income for 2010, $115,000
4. Cumulative temporary difference at December 31, 2010 giving rise to future
5. Cumulative temporary difference at December 31, 2010 giving rise to $95,000
6. The tax rate for all years 40%. No permanent difference exists
7. The company is expected to operate profitably in the future
Instructions.

A) Compute the amount of pretax financial income for 2010
B) Prepare the journal entry record income tax expense, deferred income payable for 2010

Purchase this Solution
Solution Summary

The solution provides all calculations needed for McKane Corporation, including their pretax financial income, and includes the journal entry to record income tax expense, deferred income payable.

Solution Preview

This problem requires multiple calculations.

60,000 deferred liability * 40% = 150,000
20,000 deferred liability * 40% = 50,000

Cumulative difference for future taxable amount 12/31 210,000
Cumulative difference for future taxable amount 01/01 150,000
Originating 2010 difference 60,000

Cumulative difference for deductible amounts 12/31 95,000
Cumulative difference for deductible amounts ...

Purchase this Solution
Free BrainMass Quizzes
Writing Business Plans

This quiz will test your understanding of how to write good business plans, the usual components of a good plan, purposes, terms, and writing style tips.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Marketing Research and Forecasting

The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.

Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

View More Free Quizzes
Related BrainMass Solutions

  • Accounting for income taxes payable: Deferred taxes, NOL

    Pretax financial income, $300,000. 4. Tax rate for all years, 40%. Compute taxable income for 2013. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2013.

  • Accounting

    To get DTL we multiply 225,000 with the tax rate of 40% to get 90,000. And because this is DTL it will be a credit. 64. (c) The deferred portion of IT expense is 90,000. The current portion of Income Tax Expense will be 600,000 x .35 = 210,000.

  • Future Taxable Amounts and Deferred Taxes

    (c) Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2007, assuming taxable income of $325,000.

  • Computation of Taxable Income and Journal Entries

    Problem 3 At December 31, 2006, ABC Corporation had a deferred tax liability of $25,000. At December 31, 2007, the deferred tax liability is $42,000. The corporation's 2007 current tax expense is $43,000.

  • Wilson Corporation began operations in January 2008, and pur

    * 30%) Deferred Tax Liability 1,500 (5,000 * 30%) Your entry looks like this: Income tax expense 37,500 Income tax payable 36,000 Deferred tax liability

  • Journal Entry to Record Income Tax

    339408 Journal Entry to Record Income Tax (Two Temporary Differences, One Rate, Beginning Deferred Taxes) The following facts related to Krung The Corporation. 1) Deferred tax liability, January 1, 2007, $40,000 2) Deferred tax asset, January

  • Krung Thep Corp: Income Tax Payable & Prepare Journal Entries

    Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2007. c. Prepare the income tax expense section of the income statement for 2007, beginning with the line "Income before income taxes."

  • Ambrosia Corporation, Prepare the journal entries for taxes

    479327 Ambrosia Corporation, Prepare the journal entries for income tax expense, income taxes payable, and deferred taxes for 2013.

  • Bandung Corporation began 2007 with a $92,000 balance in the

    An income statement that reports current tax expense of $82,000 and deferred tax benefit of $23,000 will report total income tax expense of $_____.

View More Related Solutions