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11) Automatic Train Company, whose income tax rate is 40%, has taxable income of $856,000 and pretax accounting income of $813,000. The entry to record the income tax includes a:

A) credit to Future Tax Liability for $17,200

B) debit to Future Tax Asset for $17,200

C) credit to Income Tax Payable for $325,200

D) debit to Income Tax Expense for $342,400

12) European Rail Corporation, whose income tax rate is 40%, has taxable income of $815,000 and pretax accounting income of $846,000. The entry to record the income tax includes a:

A) credit to Future Tax Liability for $12,400

B) debit to Future Tax Asset for $12,400

C) debit to Income Tax Expense for $326,000

D) credit to Income Tax Payable for $338,400

13) At the end of any given accounting period, the balance in a company's Income Tax Expense account will not usually equal the balance in its Income Tax Payable account.

14) Corporations generally credit Income Tax Payable based on the amount of pretax accounting income multiplied by the income tax rate.

15) If in one year Zip's income taxes payable exceeds its income tax expense then there is a future tax liability.

16) For a given year if income taxes payable is less than income tax expenses, a future tax liability is recorded.

17) The deprecation method used by a company for income tax purposes will not be the same as the method used for financial reporting.

18) Describe the process of income tax accrual. What is the goal of income tax accrual? When is income tax expense recorded? How is income tax expense calculated? Is this the same amount that will be paid to the government when the income tax return is filed? Discuss a common difference between pretax accounting income and taxable income.

19) JetNew has a tax rate of 35%.  The controller has just calculated JetNew's accounting income (pre-tax) to be $560,000 for 2010.  Taking into account the differences in calculation, JetNew's taxable income is $440,000.  Prepare the journal entry to record JetNew's taxes for 2010.

20) JetNew has a tax rate of 30%.  The controller has just calculated JetNew's accounting income (pre-tax) to be $660,000 for 2010.  Taking into account the differences in calculation, JetNew's taxable income is $530,000.  Prepare the journal entry to record JetNew's taxes for 2010.

      Outline for each account used where it would appear on JetNew's financial statements.

21) For 2011 Zip has accounting income (pre-tax) of $880,000.  Their taxable income for 2011 has been calculated at $950,0


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