Based on the depreciation, the rent collected, and other factors, the taxable income is $81,400 and the income taxes payable is <u>$24,420.</u>
Journal entry for income tax expense, deferred income taxes, and income taxes payable is:
Date Account title Debit Credit
2020 Income tax expenses $22,710
Deferred tax asset $ 6,990
Income tax payable $24,420
Deferred tax liability $ 5,280
The effective income tax rate is 35.54%.
<h3>What are the tax entries for Riverbed Company?</h3>
The taxable income is:
= Pretax income + Rent collected + Fines for pollution - Depreciation
= 63,900 + 23,300 + 11,800 - 17,600
= $81,400
Income tax payable:
= 81,400 x 30%
= $24,420
Deferred tax asset:
= 23,300 x 30%
= $6,990
Deferred tax liability:
= 17,600 x 30%
= $5,280
Effective income tax rate:
= Income tax expenses / Income before tax
= 22,710 / 63,900
= 35.54%
Find out more on deferred tax assets at brainly.com/question/15574817.
