Answer:
Duncan Corporation
a. The amount of the accounting income for 2019 is:
= $270,000
b. Journal Entries:
Debit Income tax expense $46,000
Credit Income tax payable $46,000
To record the income tax expense for 2019.
Debit Deferred tax asset $30,000
Credit Profit and Loss $30,000
To record the deferred tax asset
Debit Profit and Loss $80,000
Credit Deferred tax liability $80,000
To record the deferred tax liability.
Explanation:
a) Data and Calculations:
Taxable income for 2019 = $115,000
add Cumulative temporary difference, giving
rise to future taxable amounts = $250,000
less Cumulative temporary difference, giving
rise to future deductible amounts = $95,000
Accounting income for 2019 $270,000
Income tax expense:
Taxable income = $115,000
Tax rate (40%) 46,000
After-tax income $69,000
