In 2013, Company A's Income Before Taxes for the year is $110,000 but the Taxable Income according to the tax return was only $100,000 due to the fact that the tax deduction for depreciation was greater than the depreciation expense

Finance Apr 25, 2021

In 2013, Company A's Income Before Taxes for the year is $110,000 but the Taxable Income according to the tax return was only $100,000 due to the fact that the tax deduction for depreciation was greater than the depreciation expense. The tax rate is 30%. An adjusting entry to record taxes was recorded at December 31, 2013.

It is mid-April and Company A pays their taxes for the prior year. What is the entry required to record the payment?

Expert Solution

Journal Entry:
Date	Account Title and Explanation	Debit	Credit
31-Dec-13	Income Tax Expense ($110,000*30%)	$33,000.00
	Tax Payable ($100,000*30%)		$30,000.00
	Deferred Tax Liability		$3,000.00
	(To record income tax expense)

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