Question - Kraft Company made the following journal entry in late 2012 for rent on property it leases to Danford Corporation.
Cash 90,000
Unearned Rent Revenue 90,000
The payment represents rent for the years 2013 and 2014, the period covered by the lease. Kraft Company is a cash basis taxpayer. Kraft has income tax payable of $138,000 at the end of 2012, and its tax rate is 35%.
What amount of income tax expense should Kraft Company report at the end of 2012?
a. $79,500
b. $106,500
c. $122,250
d. $169,500
Assuming the income taxes payable at the end of 2013 is $153,000, what amount of income tax expense would Kraft Company record for 2013?
a. $121,500
b. $137,250
c. $168,750
d. $184,500