Question - Bradley Corporation began 2017 with 92,000 in deferred tax liability account. At the end of 2017 the related cumulative temporary difference amounts to 350,000 and it will reverse evenly over the next two years. Pre tax accounting income for 2017 is 525,000 the tax rate for all years is 40% and taxable income for 2017 is 405,000.
1. Compute income taxes payable for 2017
2. Prepare journal entry to record tax expense, deferred income taxes, and income taxes payable for 2017 (show calculations)
3. Prepare the income tax section of the income statement for 2017 beginning with the line income before taxes.