Question

The matrix company began operations as of the beginning 2015. During 2015, Matrix reported GAAP (book) income before taxes of $789,500. For income tax purposes, depreciation expense was $150,000; for GAAP (book) purposes, depreciation expense was $74000. Matrix accued $900,000 of revenue for GAAP (book_ purposes during 2015;$600000. of the accrued revenue was taxable during 2015. Matrix earned interest of $79800 from a municipal bond investment during 2015. Matrix's marginal income tax rate is 40%. Matrix did not make any income tax payments during 2015.

a. determine Matrix's taxable income for the year ended December 31, 2015

b. prepare the 2015 year end journal entry to record income tax expense.