Sand engaged in operations at the start of 2018 and reported $550,000 in pre-tax book income for the year. Tax depreciation for Sand exceeded book depreciation by $50,000. The tax rate for 2018 was 30%, and Congress had enacted a tax rate of 20% for the years after 2018.The journal entry to record the taxes for Sand Company at December 31, 2018 would be:

A.

DRIncome tax expense160,000 
CRDeferred tax liability10,000
CRIncome tax payable150,000

B.
DRIncome tax expense170,000 
CRDeferred tax liability10,000
CRIncome tax payable160,000

C.
DRIncome tax expense160,000 
CRCash160,000

D.
DRIncome tax expense150,000 
CRCash150,000


Answer: A

Business

You might also like to view...

The standard for obtaining a search warrant is same for both administrative cases

and criminal cases. a. True b. False

Business

What is the weighted average cost of capital after taxes if the desired capital structure is 40% debt and 60% equity, investors require a 10% pre-tax return from debt and 25% from equity, and the tax rate is 30%?

A) 18% B) 20% C) 11% D) 15% E) 19%

Business

Inventory includes:

A) goods held for sale or lease. B) farm products. C) equipment. D) intangible products.

Business

If your company factors its accounts receivable, it:

A. will use major national credit cards to allow its customers to pay for goods. B. will engage in aggressive hounding of its clients to pay their bills. C. will focus its collection activities on only the largest Accounts Receivable balances. D. sells outstanding receivables to another company.

Business