Question

Marik corporation began operations in 2018 and reported pretax financial income of 475,000 for the year. Marik income tax rate is 10 % for all years. Marik uses accrual basis for accounting purposes and cash basis for tax purposes. During 2018 the following events and transactions occurred: Amount Depreciation for tax purposes exceeded book depreciation by 10,000 Collected subscription fee for services to be provided in 2019 10,400 Required

: 1) Compute taxable income and income tax payable for 2018.

2) Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2018.

3)Prepare the income tax expense section of the income statement for 2018, beginning with the line "Income before income taxes".

Answer 1