It is mid-January and Company A is closing their year ending December 31, 2013 and they need to make their tax entry. The Income Before Taxes for the year is $110,000. Company A has also prepared a preliminary tax return for the year but the Taxable Income was only $100,000 due to the fact that the tax deduction for depreciation was greater than the depreciation expense. The tax rate is 30%. There have been no entries related to income taxes made for the year up to this point. Taxes are not required to be paid until April 15, 2014. What is the entry required as of December 31, 2013 to record taxes?

$33,000

Explanation:

The Company A shall record the journal entries in its books on December 31, 2013 in respect of income tax expense for the year ended December 31, 2013 but since there is temporary difference amounting to $10,000 due to difference between accounting deduction allowed on depreciation and tax deduction allowed on depreciation, the Company A shall also record the deferred tax liability in addition to recording the income tax payable.

Income tax expense=$100,000*30%=$30,000

Deferred tax liability=$10,000*30%= $3,000

Total tax expense=                             $33,000

eds? ederal government or feds

answer; normative economics;