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Income Tax Return, Audited Financial Statements, Bookeeping Form

Income Tax Return, Audited Financial Statements, Bookeeping Form

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Catherine Duffy: After all those fun and games calculating our current tax and deferred tax, now we can wrap things up by doing the journal entries that need to be done for 2016 and taking a look at what the income statement would look like. The 2016 journal entries for taxes are made up from the rough work we did in the current and the deferred and the step one and the step two calculations. From the step one calculation, we're going to record the current tax expense, which is a debit to an account. Current income tax expense, $14,000 is what we calculated, and a credit to income tax payable, $14,600. That would be to record current tax expense for the year. From the step two calculation, the deferred tax calculation, we had a deferred tax expense that had to be recorded of $975. The other side of that entry, we're going to get rid of the deferred tax asset that we had of $600 and set up the deferred tax liability that we need of $375 on the balance sheet. What have we

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