Prepare the journal entries to record above events. Assume that after closing all of the revenue & expense accounts (except Income Tax Expense) the Income Summary account has a a balance of $2000. Before preparing the closing entries, prepare the entries to accrue income tax expense for the month and to close the Income Tax Expense account to the Income Summary account. Assume that the corporate income tax rate is 30%.
1. Explain the causes of the differences in the net income between S&X as a sole proprietorship and S&X as a corporation.
2. Describe the effects of the business operations on Turners individual income tax return, assuming that the business is organized as 1) a sole proprietorship and 2) a corporation.