Question: Zurich company reports pre-tax Financial income of $70,000 for 2014. The following items cost taxable income to be different than pre-tax Financial income.
1. depreciation on the tax return is greater than depreciation on the income statement by $16,000.
2. rent collected on the tax return is greater than rent earned on the income statement by $22,000.
3. fines for pollution appear as an expense of $11,000 on the income statement.
Zurich tax rate is 30% for all years, and the company expects to report taxable income and all future years. There are no deferred taxes at the beginning of 2014.
taxable income is $87,000 and income taxes payable or $26,100
a. Prepare the journal entry to record income tax expense deferred income taxes and income taxes payable for 2014 there are four entries