Exercise 19-20 (Part Level Submission) The differences between the book basis and tax basis of the assets and liabilities of Sheridan Corporation at…

Exercise 19-20 (Part Level Submission)
The differences between the book basis and tax basis of the assets and liabilities of Sheridan
Corporation at the end of 2016 are presented below.
Book Basis
Accounts receivable
Litigation liability Tax Basis $48,100
30,900 $0
0 It is estimated that the litigation liability will be settled in 2017. The difference in accounts
receivable will result in taxable amounts of $29,200 in 2017 and $18,900 in 2018. The company
has taxable income of $357,000 in 2016 and is expected to have taxable income in each of the
following 2 years. Its enacted tax rate is 34% for all years. This is the company’s first year of
operations. The operating cycle of the business is 2 years. (a) Your answer is correct.
Prepare the journal entry to record income tax expense, deferred income taxes, and income
taxes payable for 2016. (Credit account titles are automatically indented when amount
is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter 0 for the amounts.)
Account Titles and Explanation Debit Income Tax Expe 127228 Deferred Tax Ass 10506 Credit Income Tax Paya 121380 Deferred Tax Liab 16354 Click if you would like to Show Work for this
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LINK TO TEXT Attempts: 1 of 3 used (b)
Indicate how deferred income taxes will be reported on the balance sheet at the end of 2016.
Sheridan Corporation
Balance Sheet $

Exercise 19-20 (Part Level Submission) The differences between the book basis and tax basis of the assets and liabilities of Sheridan Corporation at…
Exercise 19-20 (Part Level Submission) The differences between the book basis and tax basis of the assets and liabilities of Sheridan Corporation at…



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