Accounting Assignment | Custom Assignment Help
Full the work sheet. In finishing the worksheet, compute State of Illinois company earnings taxes at 41/2% of pretax earnings. The state earnings tax is deductible on the federal tax return, and the federal tax is just not deductible on the Illinois return. Assume federal company earnings tax on earnings topic to federal tax is as follows:
  • First $50,000 @15%
  • Subsequent 25,000 @25%
  • The rest @34%
Earnings between $100,000 and $335,000 is assessed a 5% federal surtax, to not exceed $11,750. Trace: Firms topic to federal earnings tax should make estimated tax funds all year long. On the time of the fee, the account Earnings Tax Expense is debited and Money is credited. To find out the taxable earnings at yr finish, web the overall debits and complete credit from the earnings assertion within the worksheet. Word that the estimated earnings tax expense is listed as a debit and have to be subtracted from complete debits when figuring out taxable earnings (federal tax is just not a deductible merchandise). Put together the journal entry for earnings taxes SB: The pretax earnings is $254,608 and the estimated earnings tax expense all year long is $72,000. After my calculation, I acquired $74,817 for the federal earnings tax and $11,457 for the state earnings tax. My solely drawback is determine the quantity I've to journalize for earnings taxes: