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During 2018, a company reported an increase in the deferred tax liability account of $77,990, an increase in the deferred tax asset account of $35,325, and an income tax liability as per the 2018 income tax return of $398,555. What is the income tax expense to be reported in the income statement for the year ending December 31, 2018

Respuesta :

adewuyirasaqjamiu

Answer:

income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220

Explanation:

Income tax expense = current tax payable + increase in DTL - increase in DTA

Note: DTL = Deffered tax liability

DTA = Differed tax asset

Income tax expense = $398,555 + $77,990 - $35,325

Income tax expense = $441,220

Income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220

abiolataiwo2015

The income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220.

Income tax expense:

Using this formula

Income tax expense=Income tax return+ Increase in deferred tax liability- Increase in the deferred tax asset account

Where:

Income tax return=$398,555

Increase in deferred tax liability=$77,990

Increase in the deferred tax asset account=$35,325

Let plug in the formula

Income tax expense=$398,555 +$77,990 - $35,325

Income tax expense=$441,220

Inconclusion the income tax expense to be reported in the income statement for the year ending December 31, 2018 is $441,220.

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