The Following Information Was Taken from the Annual Report of Leno

question 12

Short Answer

The following information was taken from the annual report of Leno Inc.
$$\begin{array} { | l | l | c | } \hline & \mathbf { 2 0 1 7 } & \mathbf { 2 0 1 6 } \\\hline \text { BALANCE SHEET } & & \\\hline \text { Deferred incame tax liability } & \mathbf { \$ 5 8 , 3 0 0 } & \mathbf { \$ 5 9 , 4 0 0 } \\\hline & & \\\hline \text { INCOME STATEMENT } & & \\\hline \text { Incame befare taxes } & \$ 109,000 & \\\hline \text { Incame tax expense } & ( 40,400 ) & \\\hline \text { Net incame } & \mathbf { \$ 6 7 , 6 0 0 } & \\\hline \text { Effective incame tax rate } 35 \% & & \\\hline\end{array}$$
Based on this information, what journal entry should Leno make in 2010 to record its income taxes?
a.
$\begin{array}{lrr} \text { Income Tax Expense} &40,400\\ \text {Deferred Income Tax } &58,300\\ \text {Deferred Income Tax } &&59,400\\ \text { Income Tax Payable } &&39,300\\\end{array}$

b.
$\begin{array}{lrr} \text { Income Tax Expense} &40,400\\ \text {Deferred Income Tax } &19,000\\ \text { Income Tax Payable } &&59,400\\\end{array}$

c.
$\begin{array}{lrr} \text { Income Tax Expense} &40,000\\ \text {Deferred Income Tax } &1,100\\ \text { Income Tax Payable } &&41,500\\\end{array}$

d.
$\begin{array}{lrr} \text { Income Tax Expense} &40,400\\ \text {Deferred Income Tax } &17,900\\ \text { Income Tax Payable } &&58,300\\\end{array}$

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Definitions:

Labour Statutes

Laws specifically related to the regulation of employment conditions, worker rights, and employer responsibilities.

Organization Process

The structured series of actions and methods designed to achieve the goals and objectives of an organization.

Good Faith

An honest intention to act without taking an unfair advantage over another party in a transaction or contractual agreement.

Employment Relationship

A legal and professional relationship between an employer and an employee characterized by the employee performing work under the control and direction of the employer in exchange for compensation.