Roberts Corp. reports pretax accounting income of $208,000, but due to a single temporary difference, taxable income is only $154,000. At the beginning of the year, no temporary differences existed. Roberts is subject to a tax rate of 25%. Required: Prepare the compound journal entry to record Roberts Corp.'s income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer from: kam110800
The answer is given below;
Explanation:
Temporary Difference $208,000-$154,000=$54,000
Taxable Temporary Difference=$54,000*25%=$13,500
Current Tax Expense =154,000*25%=$38,500
Please note that taxable temporary difference result in deferred tax expense and corresponding effect in deferred tax liability.
Deferred Tax Expense Dr.$13,500
Current Tax Expense Dr.$38,500
Deferred Tax liability Cr.$13,500
Current Tax Liability Cr.$38,500
Answer from: Quest
answer; bootstrapping is your answer;
Answer from: Quest
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Roberts Corp. reports pretax accounting income of $208,000, but due to a single temporary difference...
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