Respuesta :
The income tax expense to be reported in the income statement for the year ending December 31, 20x1 will be $ 441,220. Hence, option (b) will be regarded as the suitable answer.
Give a brief account on deferred tax liability.
A deferred tax liability for any taxes that are owed but won't be paid until a later date is shown on a company's balance sheet. The discrepancy in time between when the tax was accrued and when it is required to be paid has caused the liability to be delayed. It might, for instance, show a taxable transaction, like an installment sale, that occurred on a specific day but the taxes aren't payable until a later time. The future tax payment that a firm is required to make is represented by the deferred tax liability on its balance sheet. The difference between the company's taxable income and accounting earnings before taxes is multiplied by the anticipated tax rate for the business.
To solve :
Description $
income tax liability 398555
Add: deferred tax liability 77990
476545
Less: An increase in deferred tax asset - 35325
Amount to be booked as
expenses in current year 441220
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The complete question is mentioned below:
During 20X1, a company reported an increase in the deferred tax liability account of $77,990, an increase in the deferred tax asset account of $35,325, and an income tax liability as per the 20X1 income tax return of $398,555. What is the income tax expense to be reported in the income statement for the year ending December 31, 20X1?
A) $398,555
B) $441,220
C) $511,870
D) $285,555
