Aquafena Inc. recognized taxable income of $140,000 for the year ended December 31, 2020. Aquafena calculated a deferred tax asset and a deferred tax liability of $16,800 and $11,200, respectively, on December 31, 2020. The tax rate is 25%. Assume zero beginning balances in deferred tax accounts. a. Determine the increase in income tax payable on December 31, 2020. $ b. Prepare the income tax expense journal entry on December 31, 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2020 ♦ ◆ ◆ ◆
Aquafena Inc. recognized taxable income of $140,000 for the year ended December 31, 2020. Aquafena calculated a deferred tax asset and a deferred tax liability of $16,800 and $11,200, respectively, on December 31, 2020. The tax rate is 25%. Assume zero beginning balances in deferred tax accounts. a. Determine the increase in income tax payable on December 31, 2020. $ b. Prepare the income tax expense journal entry on December 31, 2020. Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order. Date Account Name Dr. Cr. Dec. 31, 2020 ♦ ◆ ◆ ◆
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 11P
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Transcribed Image Text:Aquafena Inc. recognized taxable income of $140,000 for the year ended December 31, 2020. Aquafena calculated a
deferred tax asset and a deferred tax liability of $16,800 and $11,200, respectively, on December 31, 2020. The tax
rate is 25%. Assume zero beginning balances in deferred tax accounts.
a. Determine the increase in income tax payable on December 31, 2020. $
b. Prepare the income tax expense journal entry on December 31, 2020.
Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in
alphabetical order.
Dr.
Cr.
Date
Account Name
♦
Dec. 31, 2020
♦
¶► ‹¶►
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