E18-11 For the year ended December 31, 2019, Nelson Co.’s income statement showed an income of $435,000 before income ta
Posted: Tue Apr 26, 2022 9:55 am
E18-11
For the year ended December 31, 2019, Nelson Co.’s
income statement showed an income of $435,000 before income tax
expenses. To compute the taxable income, the following differences
were noted:
Income from tax-exempt municipal
bonds
$60,000
Depreciation deducted for tax purposes in
excess of depreciation recorded on the
books
$120,000
Proceeds received from life insurance on
death
of an insured
employee
$100,000
Corporate tax rate for
2019
30%
Enacted tax rate for future
periods
35%
Required:
Prepare Nelson’s income tax journal entry at the end of
2019
For the year ended December 31, 2019, Nelson Co.’s
income statement showed an income of $435,000 before income tax
expenses. To compute the taxable income, the following differences
were noted:
Income from tax-exempt municipal
bonds
$60,000
Depreciation deducted for tax purposes in
excess of depreciation recorded on the
books
$120,000
Proceeds received from life insurance on
death
of an insured
employee
$100,000
Corporate tax rate for
2019
30%
Enacted tax rate for future
periods
35%
Required:
Prepare Nelson’s income tax journal entry at the end of
2019