A company reports 2021 pretax accounting income of $46 million, but because of a single temporary difference, taxable income is only $25 million

Accounting Apr 01, 2021

A company reports 2021 pretax accounting income of $46 million, but because of a single temporary difference, taxable income is only $25 million. No temporary differences existed at the beginning of the year, and the tax rate is 25%.

Prepare the appropriate journal entry to record income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions rounded to 2 decimal place (i.e., 5,500,000 should be entered as 5.50).)

Journal Entry Worksheet

Please record the income tax

Expert Solution

Journal Entry:
General Journal	Debit	Credit
Income Tax Expense	11.5
Deferred Tax Liability ($46-$25)*25%		5.25
Income Tax Payable ($25*25%)		6.25

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