The company’s income (loss) be
Note 21 Income Taxes | |||||
The company’s income (loss) before income tax provision (benefit) was subject to | |||||
taxes in the following jurisdictions for the following periods: | |||||
20X2 | 20X1 | ||||
Domestic | $205,000 | ||||
The provision (benefit) for income taxes is as follows: | |||||
20X2 | |||||
Current tax provision (benefit): | |||||
United States | |||||
Deferred tax expense (benefit): | |||||
United States | LSM | Student’s initials | |||
Income tax provision (benefit) | |||||
Significant components of the Company’s deferred tax assets and liabilities as of December 31, 20X2 and 20X1 are as follows: | |||||
December 31, | |||||
20X2 | 20X1 | ||||
Deferred tax assets: | |||||
Bad debt reserve (accounts receivable) | 18,000 | 10,000 | |||
Org exp and start up costs | |||||
Warranty reserve | |||||
Deferred compensation | |||||
Capital loss carryforward | |||||
Total deferred tax assets | $18,000 | $10,000 | |||
Deferred tax liabilities: | |||||
Fixed assets (property and equipment) | |||||
Net deferred tax assets | $18,000 | $10,000 | LSM | Student’s initials | |
A reconciliation of the U.S. income tax rate to the company’s effective tax rate is as follows: | |||||
20X2 | |||||
% | $ | ||||
Statutory Rate | 35% | $350,000 | |||
Tax exempt interest | |||||
Dividends Received Deduction | |||||
Effective Rate | |||||
Note: The tax expense reported on the Income Statement in cell C25 should be the same number reported on the Note 21 Income Taxes tab, cells C42 and B19.
- Complete the Schedule M-1 template tab in the SAM worksheet student.xls and answer the following questions:
- What was the journal entry to record current tax expense for 20X2?
- What was the journal entry to record deferred tax expense for 20X2?
- What is the net DTA/DTL reported on the balance sheet?