Example - Journal Entry Calculations

Current Provision Journal Entry

	Debits	Credits
Current Tax Expense	1,593,725	N/A
Taxes Payable	N/A	1,593,725

Journal Entry Calculation (B/S)

Deferred Tax Provision

	Debits	Credits
Deferred Tax Asset/Liability	207,813	N/A
Deferred Tax Expense	N/A	207,813

Journal Entry Calculation (I/S)

Total Deferred Provision

	Debits	Credits
Deferred Tax Asset/Liability	207,813	N/A
Deferred Tax Expense	N/A	207,813

Deferred Provision Journal Entry (B/S Approach)		Deferred Provision Journal Entry (I/S Approach)
Total Ending Balances	17,857,028	Temporary Difference Activity	559,180
- Balance Sheet Only Adjs	(17,500,000)	x Tax Rate	35%
- Total Beginning Balances	(149,215)	+ After-Tax Temporary Diff Activity	12,100
= Deferred Provision	207,813	= Deferred Provision	207,813

This article applies to: