Company P Had Pretax Profit of $30,000 in 20X0 and $34,000

question 110

Essay

Company P had pretax profit of $30,000 in 20X0 and $34,000 in 20X1. A revenue of $2,000 was included correctly on the 20X0 income statement and was properly reported on the 20X1 income tax return. The corporate income tax rate was 25%. Give the entries relating to the incurrence of the tax liability for 20X0 and 20X1: 20X0: 20X1:

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Definitions:

Maturity

The date on which the principal amount of a loan, bond, or other financial instrument must be repaid to creditors.

Maker

In the context of finance, refers to the entity that issues or creates a financial instrument, such as a check or note.

Maturity Value

Maturity value is the amount payable to an investment's holder at its maturity date, including the principal and any remaining interest.

Note

A written agreement acknowledging a debt and promising repayment.