Question

During 2018, a company reported an increase in the deferred tax liability account of $77,990, an increase in the deferred tax asset account of $35,325, and an income tax liability as per the 2018 income tax return of $398,555. What is the income tax expense to be reported in the income statement for the year ending December 31, 2018

Answer 1

Answer:

income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220

Explanation:

Income tax expense = current tax payable + increase in DTL - increase in DTA

Note: DTL = Deffered tax liability

DTA = Differed tax asset

Income tax expense = $398,555 + $77,990 - $35,325

Income tax expense = $441,220

Income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220