Smyrna Company had financial and taxable incomes as follows:

The tax rate for all three years was 30%.
Required:
a.Prepare the journal entries to record income taxes for all three years.
b.Explain why the taxes paid in 2016 are different from the tax return and the amount reported in the financial statements and provide an example of what could cause this difference.

Question

Smyrna Company had financial and taxable incomes as follows:

The tax rate for all three years was 30%.
Required: 
a.Prepare the journal entries to record income taxes for all three years.
b.Explain why the taxes paid in 2016 are different from the tax return and the amount reported in the financial statements and provide an example of what could cause this difference.

Quizplus · Accepted Answer

The Answer of Smyrna Company had financial and taxable incomes as follows:

The tax rate for all three years was 30%.
Required: 
a.Prepare the journal entries to record income taxes for all three years.
b.Explain why the taxes paid in 2016 are different from the tax return and the amount reported in the financial statements and provide an example of what could cause this difference.

Smyrna Company Had Financial and Taxable Incomes as Follows