Question

In ins first yeat of operations, the Aaron Companys 12/31/26 adjusting tax joumal entry inclades an entry to income Tax Expense of $100 a Deferred Tax liability of $10. and income tax Payable of $90. What will be included in the presentation of Income Tax Expense on the 2026 Income Statement?

Select one:
a. A $10 deferred credit
b. A $10 deferred debit
c. A current portion of $100
d. A cuttent portion of $10

Answer 1

The 2026 Income Statement for Aaron Company will present an income tax expense of $100, which includes the current portion of the income taxes; deferred taxes are not itemized separately on the income statement.

Step-by-step explanation:

The income tax expense presented on the 2026 Income Statement for Aaron Company will include only the current portion of the income taxes, which is $100. The adjustment to income tax expense included an entry to a Deferred Tax Liability of $10 and income tax payable of $90.

Therefore, the presentation will not include the deferred tax amount of $10 as a separate item; it will be part of the total income tax expense of $100 stated. Any deferred tax amounts would be presented in the balance sheet rather than the income statement.