Homework answers / question archive / the comparative statements of earnings of Martin Corporation for fiscal years 2020 and 2021 showed the following summarized pretax data   2020 201 sales revenue $55,000 63,000 expenses ( excluding income taxes) 39,000 43,000 pretax earnings 16,000 20,000 the expenses in 2020 included an amount of $4000 that was deductible for tax purposes in 2021

the comparative statements of earnings of Martin Corporation for fiscal years 2020 and 2021 showed the following summarized pretax data   2020 201 sales revenue $55,000 63,000 expenses ( excluding income taxes) 39,000 43,000 pretax earnings 16,000 20,000 the expenses in 2020 included an amount of $4000 that was deductible for tax purposes in 2021

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the comparative statements of earnings of Martin Corporation for fiscal years 2020 and 2021 showed the following summarized pretax data

the expenses in 2020 included an amount of $4000 that was deductible for tax purposes in 2021. The average income tax rate was 32 percent. Taxable income from the income tax returns was $20,000 for 2020 and $16,000 for 2021.

Required

a. for each year, compute (a) the income taxes payable and (b) the deferred income tax. is the deferred income tax a liability or asset? explain

b. show what amounts related to income taxes should be reported each year on the statement of earnings and the statement of financial position. assume that the income tax is paid March 1 of the next year

c. explain why income tax expense is not simply the amount of cash paid during the year