At the Beginning of the Current Fiscal Year, Withering Corporation

question 67

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.
Required:
Prepare the journal entry or entries to record income taxes for the year.

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Definitions:

Trade Policies

Laws and regulations enacted by governments to manage international trade, designed to protect domestic industries, control exports and imports, and foster economic growth.

Trade Balance

The variance between what a nation sells and buys from abroad in terms of goods and services.

National Saving

The total amount saved by a nation's households and businesses, plus government budget surplus, which can be used for investment.

Open-Economy Macroeconomic Model

A model that analyzes an economy that engages in international trade, considering the impact of exports, imports, and capital flows.