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Homework answers / question archive / 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

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

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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?

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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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