Sunland Corporation has one temporary difference at the end of 2025 that will reverse and cause taxable amounts of $56,200 in2026, $61,000 in 2027, and $66,500 in 2028. Sunland's pretax financial income for 2025 is $285,200, and the tax rate is 30% for allyears. There are no deferred taxes at the beginning of 2025.Your answer is correct.Compute taxable income and income taxes payable for 2025.Taxable incomeIncome taxes payable $eTextbook and MediaList of AccountsYour answer is partially correct.$Account Titles and ExplanationIncome Tax ExpensePrepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (List all debitentries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry isrequired, select "No Entry" for the account titles and enter O for the amounts.)Deferred Tax LiabilityIncome Tax Payable10150030450DebitICredit30450

Deferred tax liability arises from temporary differences between accounting and tax rules. When…

Answered: Account Titles and Explanation Income…

Business

Accounting

Account Titles and Explanation Income Tax Expense Deferred Tax Liability Income Tax Payable Debit In Credit 30450

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 8E: Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a...

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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

Sunland Corporation has one temporary difference at the end of 2025 that will reverse and cause taxable amounts of $56,200 in
2026, $61,000 in 2027, and $66,500 in 2028. Sunland's pretax financial income for 2025 is $285,200, and the tax rate is 30% for all
years. There are no deferred taxes at the beginning of 2025.
Your answer is correct.
Compute taxable income and income taxes payable for 2025.
Taxable income
Income taxes payable $
eTextbook and Media
List of Accounts
Your answer is partially correct.
$
Account Titles and Explanation
Income Tax Expense
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025. (List all debit
entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts.)
Deferred Tax Liability
Income Tax Payable
101500
30450
Debit
I
Credit
30450

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