Wittco Company reports pretax GAAP income in Year 1 , its first year of operations,...
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Wittco Company reports pretax GAAP income in Year 1 , its first year of operations, of $100,000. Temporary differences in the GAAP basis and tax basis of assets arose during the year from the followng two sources. - Prepayment of Year 2 rent in the amount of $24,000 in Year 1. - instaliment sale totaling $36,000, with cash collections expected in two equal amounts in Year 3 and Year 4. The enacted tax rates are 25% in Year 1,30% in Year 2, and 40% in Year 3 and thereafter. Required a. Record the income tax joumal entry on December 31 of Year 1. b. Record the income tax journal entry on December 31 of Vear 1, assuming that a new tax law is passed in Year 1 decreasing the tax rate to 20% for Year 1 and all years thereafter. b. Record the income tax journal entry on December 31 of Year 1 , assuming that a new tax law is passed in Year 1 decreasing the tax rate Year 1 and all years thereafter. b. sing the
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