In 2014, Its First Year of Operations, Wilber Company Reported

question 82

Multiple Choice

In 2014, its first year of operations, Wilber Company reported pretax accounting income of $60,000. Included in the $60,000 was an expense for accrued, unpaid warranty costs of $8,000, which are not deductible until paid for income tax purposes. Wilber's income tax rate was 20%. The entry to record the income tax expense would include a

• A) credit to Income Tax Expense for $12,000
• B) credit to Income Taxes Payable for $12,000
• C) credit to Deferred Tax Liability for $1,600
• D) debit to Deferred Tax Asset for $1,600

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