EXERCISE 2:The pretax financial income of T Company differs from its taxable income throughout each...
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Accounting
EXERCISE 2:The pretax financial income of T Company differs from its taxable income throughout each of 4 years as follows.
Pretax Year Financial Income Taxable Income Tax Rate
2017 $290,000 $180,000 35%
2018 320,000 225,000 40
2019 350,000 260,000 40
2020 420,000 560,000 40
The difference between pretax financial income and taxable income in each period is due to a temporary difference related to depreciation. No deferred income taxes existed at the beginning of 2017.
Required:
(a) Prepare journal entries to record income taxes in all 4 years.
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