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  3. a) explain deferred income taxes. b) the following

a) Explain Deferred Income taxes. b) The following information is available for ABC Corporation for...

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Accounting

a) Explain Deferred Income taxes. b) The following information is available for ABC Corporation for 2018 (its first year of operations). 1. Deferral, for book purposes, of Tk. 30,000 of rent received in advance. The rent will be recognized equally over the years 2019- 2021. 2. Taxable income Tk.120,000. 3. Excess of tax depreciation over book depreciation, Tk.60,000. This Tk.60,000 difference will reverse totally in 2019. 4. Tax rate for all years, 30%. Required: I. Compute pretax financial income for 2018. II. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2018. III. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, assuming taxable income of Tk.475,000.

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