PROBLEM IAccounting for Income Taxes (10 points) -The records of David K Corp. provided the...
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Accounting
PROBLEM IAccounting for Income Taxes (10 points)
-The records of David K Corp. provided the following data at the end of Years 2018 through 2020 relating to income tax allocation:
Yr 2018
Yr 2019
Yr 2020
Pretax accounting income
300,000
280,000
280,000
Taxable income (tax return)
260,000
300,000
300,000
Assume David K has one temporary difference. He recognized an expense in 2018 for tax purposes (prepaid expense) of $40,000, which will be amortized for accounting purposes over the next two years. The tax rate for all three years is 30%.
Tax entry for end of year 2018.
Dec. 31, 2018
Assume everything is the same, but the tax rate in 2018 was 40%. (Tax rates for 2019 and 20120 are 20%)
Tax entry for end of year 2018.
Dec. 31, 2018
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