Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000 Required: What is the amount of income tax expense in 20X9? Tax expense S 23,250 Prepare the income tax entry or entries.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed.
CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset.
account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC
of $340,000.
Required:
What is the amount of income tax expense in 20X9?
Tax expense
$
Prepare the income tax entry or entries.
View transaction list
No
1
2
Date
20X9
23,250
20X9
View journal entry worksheet
Income tax expense
General Journal
Deferred income tax asset
Income tax payable
Income tax payable
Income tax expense
Debit
Credit
Transcribed Image Text:Mercury Limited reported earnings of $75,000 in 20X9. The company has $55,000 of depreciation expense this year, and claimed. CCA of $90,000. The tax rate was 25%. At the end of 20X8, there was a $10,000 loss carryforward reported in a deferred tax asset. account valued at $2,200, and a deferred tax liability of $35,200 caused by capital assets with a net book value of $500,000 and UCC of $340,000. Required: What is the amount of income tax expense in 20X9? Tax expense $ Prepare the income tax entry or entries. View transaction list No 1 2 Date 20X9 23,250 20X9 View journal entry worksheet Income tax expense General Journal Deferred income tax asset Income tax payable Income tax payable Income tax expense Debit Credit
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

Blurred answer
Knowledge Booster
Capital Gains and Losses
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education