Question - The following facts relate to Krug Thep Corporation.
1. Deferred tax liability, January 1 2014, $40,000.
2. Taxable income for 2014, $95,000.
3. Pretax financial income 2014, $200,000.
5. Cumulative temporary deference at December 31, 2014, giving rise to future taxable amounts, $240,000
6. Cumulative temporary difference at December 31, 2014 giving rise to future deductible amount, $35,000.
7. Tax rate for all year's 40%
8. The company is expected to operate profitably in the future.
(a) Compute income taxes payable for 2014.
(b) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2014.
(c) Prepare the income tax expense section of the balance sheet beginning with the line income before income taxes.