Wicks Corporation began operations on January 1, 2016. At the end of 2016, Wicks reported...
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Wicks Corporation began operations on January 1, 2016. At the end of 2016, Wicks reported pretax financial income of $55,600 and taxable income of $60,130, due to two temporary differences. The income tax rate is 30% for 2016 through 2018, but Congress has enacted a tax rate of 35% for 2019 and beyond. To determine its deferred taxes, Wicks prepared the following schedule of expected future taxable and deductible amounts for the two temporary differences:
| 2017 | 2018 | 2019 | 2020 | |
| Future taxable amounts | $4,600 | $4,000 | $4,600 | $4,600 |
| Future deductible amount | (15,300) |
Required:
| 1. | Prepare Wickss income tax journal entry at the end of 2016. Assume a valuation allowance is not required. |
| 2. | Prepare the lower portion of the 2016 income statement for Wicks. |
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