Zurich Inc. reports pretax financial income of $70,000 in 2017. The following items cause taxable...
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Zurich Inc. reports pretax financial income of $70,000 in 2017. The following items cause taxable income to be different from pretax financial income: a. Depreciation on the tax return is greater than the depreciation on the income statement by $16,000. b. Rent collected and reported on the tax return is greater than rent recognized on the income statement by $22,000 c. Fines for pollution appear as an expense of $11,000 on the income statement. Zurichs tax rate is 30% for all years and the company expects to report taxable income in all future years. There are no deferred taxes at the beginning of 2017.
Required:
1. Determine the taxable income for 2017?
2. Determine the deferred tax asset for 2017?
3. Determine the deferred tax liability for 2017?
4. Record the journal entry for income tax expense for 2017?
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