Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. the following information is available for blue co

The following information is available for Blue Corporation for 2017. 1....

70.2K

Verified Solution

Question

Accounting

The following information is available for Blue Corporation for 2017.

1. Depreciation reported on the tax return exceeded depreciation reported on the income statement by $116,000. This difference will reverse in equal amounts of $29,000 over the years 20182021.
2. Interest received on municipal bonds was $9,700.
3. Rent collected in advance on January 1, 2017, totaled $55,800 for a 3-year period. Of this amount, $37,200 was reported as unearned at December 31, 2017, for book purposes.
4. The tax rates are 40% for 2017 and 35% for 2018 and subsequent years.
5. Income taxes of $350,000 are due per the tax return for 2017.
6.

No deferred taxes existed at the beginning of 2017.

a) Compute taxable income for 2017.

b) Compute pretax financial income for 2017.

c) Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2017 and 2018. Assume taxable income was $1,035,000 in 2018

d) Prepare the income tax expense section of the income statement for 2017, beginning with Income before income taxes.

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students