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Ivanhoe Corp. has a deferred tax asset account with a balance of $72,800 at the end of 2019 due to a single cumulative temporary difference of $364,000. At the end of 2020, this same temporary difference has increased to a cumulative amount of $416,000. Taxable income for 2020 is $762,000. The tax rate is 20% for all years. No valuation account related to the deferred tax asset is in existence at the end of 2019.

Required:
a. Record income tax expense, deferred income taxes, and income taxes payable for 2020, assuming that it is more likely than not that the deferred tax asset will be realized.
b. Record income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that none of the deferred tax asset will be realized.

Sagot :

batolisis

Answer:

attached below

Explanation:

Given data :

Deferred tax asset account = $72800 at the end of 2019

single cumulative temporary difference = $364,000

At the end of 2020

single cumulative temporary difference = $416,000

Taxable income for 2020 = $762000

tax rate = 20% for all years

A) attached below

deferred income tax asset = $( 416,000 - 364,000 ) * 20%

                                            = $10400

Income tax payable = $(762,000 ) * 20% = $152,400

Income tax expense = ( income tax payable - deffered income tax )

                                   = $152400 - $10400 = $142,000

View image batolisis
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