Deferred tax Liability

Journal Entries Journal Entries

1.) to record the current tax expense 1.) to record the current tax expense

Income tax expense xxx Income tax expense

Income tax payable xxx

2.) to record the deferred tax liability 2.) to record the deferred tax liability

Income tax expense xxx Deferred tax asset

Deferred tax liability xxx

Total tax expense xxx Total tax expense

current tax expense xxx current tax expense
deferred tax liability xxx Deferred tax Asset

Income statement presentation Income statement presentation

Income tax before income tax xxx Income tax before income tax
Income tax expense: xxx Income tax expense:
Current tax expense xxx xxx
Deferred tax expense xxx
Net Income Net Income

Chapter 16: Income Tax

16-1 16-2
A.) Prepare journal entries for 2020 A.) Prepare journal entries relating to in

Income Tax Expense 450,000 Income Tax Expense

Income Tax Payable (30%*1,500,000) 450,000

Income Tax Expense (30%*500,000) 150,000 Income Tax Asset (30%*1,000,0

Deferred Tax Liability 150,000

Total tax expense (30%*2,000,000) 600,000 Total tax expense (30%*3,000,0

Current tax expense (30%*1,500,000) 450,000 Current tax expense (30%*4,000
Deferred tax liability 150,000 Deferred tax liability

B.) Compute the total income tax expense for 2020 B.) Compute the total income tax expen

Income tax before income tax 2,000,000 Income tax before income tax
Income tax expense: Income tax expense:
Current tax expense 450,000
Deferred tax expense 150,000 600,000
Net Income 1,400,000 Net Income
16-3
A.) Prepare journal entries to record the income tax and deferred tax for 2020 and 2021

2020 2021
Income Tax Expense 2,100,000 Income Tax Expense
Income Tax Payable (30%*7,000,000) 2,100,000

Income Tax Asset (30%*1,000,000) 300,000 Income tax asset (30%*1,000,00

Deferred Tax Benefit 300,000

Total tax expense (30%*6,000,000) 1,800,000 Total tax expense (30%*9,000,0

Current tax expense (30%*7,000,000) 2,100,000 Current tax expense (30%*8,000
deferred tax asset (300,000) Deferred tax asset

B.) Compute the total income tax expense for 2020 2021

Income tax before income tax 6,000,000 Income tax before income tax
Income tax expense: Income tax expense:
Current tax expense 2,100,000
Income tax benefit (300,000) 1,800,000
Net Income 4,200,000 Net Income

16-4
A.) Prepare journal entries to record the income tax and deferred tax for 2020 and 2021

2020 2021
Income tax expense 1,500,000 Income tax expense
Income tax payable (30%*5,000,000) 1,500,000

Income tax expense (30%*500,000) 150,000 Income tax expense

Deferred tax liability 150,000

Total tax expense (30%*5,500,000) 1,650,000 Total tax expense

current tax expense (30%*5,000,000) 1,500,000 current tax expense
deferred tax liability 150,000 deferred tax liability

b.) Income statement presentation b.) Income statement presentation

Income tax before income tax 5,500,000 Income tax before income tax
Income tax expense: Income tax expense:
Current tax expense 1,500,000
Deferred tax expense 150,000 1,350,000
Net Income 4,150,000 Net Income
16-5
2020
income tax expense 180,000
deferred tax liability 180,000
(30%*600,000)

Income tax expense 720,000

Income tax payable 720,000
(30%*2,400,000)

2021
income tax expense 450,000
deferred tax liability 450,000
(30%*1,500,000)

Income tax expense 1,080,000

Income tax payable 1,080,000
(30%*3,600,000)

2022
 Deferred tax Asset

to record the current tax expense

Income tax expense xxx

Income tax payable xxx

to record the deferred tax liability

Deferred tax asset xxx

Income tax benefit xxx

Total tax expense xxx

current tax expense xxx
Deferred tax Asset xxx

ome statement presentation

Income tax before income tax xxx

Income tax expense:
Current tax expense xxx
Income tax benefit xxx xxx
Net Income xxx

Prepare journal entries relating to income tax for 2020

Income Tax Expense 1,200,000

Income Tax Payable (30%*4,000,000) 1,200,000

Income Tax Asset (30%*1,000,000) 300,000

Deferred Tax Benefit 300,000

Total tax expense (30%*3,000,000) 900,000

Current tax expense (30%*4,000,000) 1,200,000
Deferred tax liability (300,000)

Compute the total income tax expense for 2020

Income tax before income tax 3,000,000

Income tax expense:
Current tax expense 1,200,000
Income tax benefit (300,000) 900,000
Net Income 2,100,000
 Income Tax Expense 2,400,000
Income Tax Payable (30%*8,000,000) 2,400,000

Income tax asset (30%*1,000,000) 300,000

Deferred Tax Benefit 300,000

Total tax expense (30%*9,000,000) 2,700,000

Current tax expense (30%*8,000,000) 2,400,000
Deferred tax asset 300,000

Income tax before income tax 9,000,000

Income tax expense:
Current tax expense 2,400,000
Income tax benefit 300,000 2,100,000
Net Income 6,900,000

Income tax expense 2,250,000

Income tax payable 2,250,000

Income tax expense 150,000

Deferred tax liability 150,000

Total tax expense 2,100,000

current tax expense 2,250,000
deferred tax liability (150,000)

Income statement presentation

Income tax before income tax 7,000,000

Income tax expense:
Current tax expense 2,250,000
Deferred tax expense (150,000) 2,100,000
Net Income 4,900,000