Dell Catering accrues its income taxes quarterly for the sole manufacturing facility located in Brunswick,Florida.Although Dell Catering is not subject to local tax,it is required to pay both state and federal income taxes,which are 12% and 28% of net income,respectively.Second quarter income for Dell Catering amounted to $550,000.
Required:
1.Prepare the appropriate journal entry for Dell Catering as of June 30.
2.Explain how income taxes are shown on a multi-step income statement.

Question

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The Answer of Dell Catering accrues its income taxes quarterly for the sole manufacturing facility located in Brunswick,Florida.Although Dell Catering is not subject to local tax,it is required to pay both state and federal income taxes,which are 12% and 28% of net income,respectively.Second quarter income for Dell Catering amounted to $550,000.
Required:
1.Prepare the appropriate journal entry for Dell Catering as of June 30.
2.Explain how income taxes are shown on a multi-step income statement.

Dell Catering Accrues Its Income Taxes Quarterly for the Sole