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Cfas Chapter 25

The document contains journal entries for income tax expenses and payments for ABC Company, Zeus Company, and Colombo Company for years 2020 and 2021. ABC Company recorded a current tax expense of $450,000 and deferred tax liability of $150,000 for 2020. Zeus Company recorded a current tax expense of $1,200,000 and a deferred tax asset of $300,000 for 2020. Colombo Company recorded a current tax expense of $1,500,000 and deferred tax liability of $150,000 for 2020.

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Kristel Fields
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188 views6 pages

Cfas Chapter 25

The document contains journal entries for income tax expenses and payments for ABC Company, Zeus Company, and Colombo Company for years 2020 and 2021. ABC Company recorded a current tax expense of $450,000 and deferred tax liability of $150,000 for 2020. Zeus Company recorded a current tax expense of $1,200,000 and a deferred tax asset of $300,000 for 2020. Colombo Company recorded a current tax expense of $1,500,000 and deferred tax liability of $150,000 for 2020.

Uploaded by

Kristel Fields
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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ABC Company

Journal Entries
Date Account Titles and Explanation PR Debit Credit
Dec 31 Income tax expense 450,000
Income tax payable (1,500,000 x 30%) 450,000
To record the current tax expense

Dec 31 Income tax expense 150,000


Deferred tax liability (500,000 x 30%) 150,000
To record the deferred tax liability

Dec 31 Income tax payable 200,000


Cash 200,000
To record the estimated tax payment

Current Tax Expense 450,000


Deferred Tax Expense 150,000
Total Income Tax Expense 600,000
Zeus Company
Journal Entries
Date Account Titles and Explanation PR Debit Credit
Dec 31 Income tax expense 1,200,000
Income tax payable (4,000,000 x 30%) 1,200,000
To record the current tax expense

Dec 31 Deferred tax asset (1,000,000x30%) 300,000


Income tax benefit 300,000
To record the deferred tax asset

Dec 31 Income tax payable 500,000


Cash 500,000
To record the estimated tax payment

Current Tax Expense 1,200,000


Income Tax Benefit -300,000
Total Income Tax Expense 900,000
Zeus Company Income tax statement
Journal Entries
Date-2020 Account Titles and Explanation PR Debit Credit Income before tax
Dec 31 Income tax expense 2,100,000 Income tax Expense
Income tax payable (7,000,000 x 30%) 2,100,000
To record the current tax expense
Net income
Dec 31 Deferred tax asset (1,000,000x30%) 300,000
Income tax benefit 300,000
To record the deferred tax asset

Date-2021 Account Titles and Explanation PR Debit Credit Income tax statement
Dec 31 Income tax expense 2,400,000
Income tax payable (8,000,000 x 30%) 2,400,000 Income before tax
To record the current tax expense Income tax Expense

Dec 31 Income tax expense 300,000


Deferred tax asset (1,000,000x30%) 300,000 Net income
To record the deferred tax asset
Income tax statement presentation for 2020

Income before tax 6,000,000


Income tax Expense
Current Tax Expense 2,100,000
Income tax benefit -300,000 1,800,000
Net income 4,200,000

Income tax statement presentation for 2021

Income before tax 9,000,000


Income tax Expense
Current Tax Expense 2,400,000
Income tax benefit 300,000 2,700,000
Net income 6,300,000
Colombo Company
Journal Entries Income tax statemen
Date 2020 Account Titles and Explanation PR Debit Credit
Dec 31 Income tax expense 1,500,000 Income before tax
Income tax payable (5,000,000 x 30%) 1,500,000 Income tax Expense
To record the current tax expense

Dec 31 Income tax expense 150,000 Net income


Deferred tax liability (500,000 x 30%) 150,000
To record the deferred tax liability

Date 2021 Account Titles and Explanation PR Debit Credit Income tax statemen
Dec 31 Income tax expense 2,250,000
Income tax payable (7,500,000 x 30%) 2,250,000 Income before tax
To record the current tax expense Income tax Expense

Dec 31 Deferred tax liability 150,000


Income tax expense 150,000 Net income
To record the deferred tax liability
Income tax statement presentation for 2020

Income before tax 5,500,000


Income tax Expense
Current Tax Expense 1,500,000
Deferred tax expense 150,000 1,650,000
Net income 3,850,000

Income tax statement presentation for 2021

Income before tax 7,000,000


Income tax Expense
Current Tax Expense 2,250,000
Decrease in deferred tax liability -150,000 2,100,000
Net income 4,900,000

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