Pearl Corp. has a deferred tax asset account with a balance of $71,600 at the end of 2024 due to a single cumulative temporary difference of $358,000. At the end of 2025, this same temporary difference has increased to a cumulative amount of $490,000. Taxable income for 2025 is $857,000. The tax rate is 20% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2024. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Pearl Corp. has a deferred tax asset account with a balance of $71,600 at the end of 2024 due to a single cumulative temporary difference of $358,000. At the end of 2025, this same temporary difference has increased to a cumulative amount of $490,000. Taxable income for 2025 is $857,000. The tax rate is 20% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2024. (a) Record income tax expense, deferred income taxes, and income taxes payable for 2025, assuming that it is more likely than not that the deferred tax asset will be realized. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 5RE: Turnip Company purchased an asset at a cost of 10,000 with a 10-year life during the current year....
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