Western Corporation Has Taxable Income of $390,000 and Pretax Accounting

question 59

Multiple Choice

Western Corporation has taxable income of $390,000 and pretax accounting income of $363,000.The company's income tax rate is 30%.The journal entry to record the income tax includes a:

• A)debit to Income Tax Expense $117,000.
• B)credit to Deferred Tax Asset $8,100.
• C)debit to Deferred Tax Asset $8,100.
• D)credit to Income Tax Payable $108,900.

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Definitions:

Floor Planning

A type of business loan generally made for “big-ticket” items. The business holds the item in inventory and pays interest, but it is actually owned by the lender until the item is sold.

Unsecured Loan

A loan that doesn't require collateral and is based on the borrower's creditworthiness.

Fixed-Rate Loan

A loan where the interest rate remains constant throughout the term of the loan, providing predictability in payments.

Mortgage Broker

A professional intermediary who facilitates the process of acquiring a mortgage loan for individuals or businesses.