A company makes the following journal entry for 2021: Dr. Income Tax Expense xxxx Dr. Deferred Tax Asset 62,000 Cr. Deferred Tax Liability 11,000 Cr. Income Tax Payable 536,000 On the income statement, the current portion of income tax expense for 2021 appears as: _______________

A company makes the following journal entry for 2021: Dr. Income Tax Expense xxxx Dr. Deferred Tax Asset 62,000 Cr. Deferred Tax Liability 11,000 Cr. Income Tax Payable 536,000 On the income statement, the current portion of income tax expense for 2021 appears as: _______________

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter12: Tax Credits And Payments

Section: Chapter Questions

Problem 23P

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

A company makes the following journal entry for 2021:

Dr. Income Tax Expense xxxx

Dr. Deferred Tax Asset 62,000

Cr. Deferred Tax Liability 11,000

Cr. Income Tax Payable 536,000

On the income statement, the current portion of income tax expense for 2021 appears as: _______________.

Definition Definition Method of recording financial transactions in the book of original entry by debiting and crediting the accounts affected by a transaction using the golden rules of accrual accounting.

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