Question

The following information is for Hulk Gyms' first year of operations. Amounts are in millions of dollars. The enacted tax rate is 25%. Year Future Taxable Amounts Future Amounts 2021 2022 2023 2024 2025 Total Accounting income $ 124 Temporary difference: Prepaid insurance (28 ) $ 7 $ 7 $ 7 $ 7 $ 28 Taxable income $ 96 Required: Prepare a compound journal entry to record the income tax expense for the year 2021.

Answer 1

Step-by-step explanation:

Year Future Taxable Amounts Future Amounts

2021 2022 2023 2024 2025 Total

Accounting income $124

Temporary difference:

Prepaid insurance (28 ) $7 $7 $7 $7 $28

Taxable income $96