At the Beginning of the Current Fiscal Year,Withering Corporation Had

question 84

Essay

At the beginning of the current fiscal year,Withering Corporation had a deferred income tax liability balance of $20,000,which relates to depreciable assets.During the year,Withering reported the following information:
• Income before income taxes for the year was $300,000 and the tax rate was 45%.
• Depreciation expense was $150,000 and CCA was $130,000.
• Unearned rent revenue was reported at $120,000.Rent revenue is taxable when the cash is received.There was no opening balance in the unearned rent revenue account at the beginning of the year.
• No other items affected deferred tax amounts other than these transactions.
Requirement:
Prepare the journal entry or entries to record income taxes for the year.

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Definitions:

Wholesale Division

A segment of a company that deals with selling goods in large quantities at lower prices typically to retailers, rather than selling them directly to consumers.

Fixed Expenses

Expenses, like rent, wages, and insurance fees, that stay the same no matter how much is produced or sold.

Break-even Sales

The amount of revenue needed to cover total fixed and variable costs, resulting in zero profit or loss.

Consumer Division

A part of a company focused on selling products or services directly to end-users or consumers.