At the End of Its First Year of Operations, Prince

question 163

Essay

At the end of its first year of operations, Prince Charming Corporation had a current liability of $300,000 for unearned rent. This was the only difference between pretax accounting income and taxable income. Assume an income tax rate of 40%.
Required:
The tax liability from the tax return is $750,000. Prepare the journal entry to record income taxes for Prince Charming's first year of operations. Show well-labeled computations.

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Definitions:

Association

A connection or cooperative link between people, organizations, or concepts.

Falls

Incidents where individuals unexpectedly come to rest on the ground or lower level, often leading to injuries, especially among older adults.

Sampling Frame

The list or database from which a sample is drawn for the purpose of conducting research or statistical analysis.

Postsecondary Community

A collective term referring to institutions, organizations, and populations involved in education beyond secondary school, including colleges and universities.