the johnson corporation 039 s lead accountant 497594

The Johnson Corporation’s lead accountant shows the following information:
On 1/1/2012, Johnson purchased a bottling machine for $800,000
A) Straight-Line basis Depreciation for 5 years for tax purposes. (Use the half-year convention for tax purposes. Half a year of depreciation is allowable in the year of acquisition and in the year of disposition. A Company depreciates an asset to zero value so that there is no salvage value at the end of its MACRS life. Use the IRS-published MACRS table of MACRS Depreciation Rates, by Property Class.
B) Use the 8-Year Useful Life for Financial Reporting.
C) Tax-Exempt Municipal Bonds yielded Interest of $1,500,000 in 2013.
D) Pretax financial income is $2,300,000 in 2012 and $2,400,000 in 2013.
E) The company recognized an Extraordinary Gain of $150,000 in 2013 (which is fully taxable).
F) Taxable Income is expected in future years with an expected tax rate of 35%.

Required:
1) Compute Taxable Income & Income Taxes Payable for 2013.
2) Prepare the Journal Entries for Income tax Expense, Income Taxes Payable, and Deferred Taxes for 2013.
3) Prepare the Deferred Income Taxes presentation for 12/31/2013 Balance Sheet.