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  3. evergreen company's 2020 reconciliation between pr

Evergreen Company's 2020 reconciliation between pretax GAAP income and taxable income is as follows. ...

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Accounting

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Evergreen Company's 2020 reconciliation between pretax GAAP income and taxable income is as follows.

Pretax GAAP income

$200,000
Depreciation adjustment (40,000)
Permanent difference 1,250
Taxable income $161,250

The company had one temporary difference due to the GAAP basis of equipment exceeding the tax basis of the equipment. Record the income tax journal entry for 2020, assuming an enacted tax rate of 25%. Assume that the December 31, 2019, deferred tax liability balance was $5,000.

  • Note: List multiple debits (when applicable) in alphabetical order and list multiple credits (when applicable) in alphabetical order.
  • Note: Round amounts to the nearest whole dollar.

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Date Account Name Dr. Cr. Dec. 31, 202 ~ Deferred Tax Asset Valuation Allowance for Deferred Tax Asset Income Tax Payable Liability for Unrecognized Tax Benefits Deferred Tax Liability Income Tax Expense N/A

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