Let's break down the requirements and process into **2 steps**: --- ### **Step 1: Determine 2022 Pre-Tax Income** - **Explanation:** You are asked to **examine the 2022 income statement** from the Custom reports tab. The pre-tax income is the income **before** federal income taxes are deducted. This value is needed to calculate the federal income tax expense. - **Action:** Review the 2022 income statement and **find the pre-tax (or "income before tax") amount**. --- ### **Step 2: Calculate Federal Income Tax Expense** - **Explanation:** The federal income tax rate is **21%**. Multiply the pre-tax income (from Step 1) by **21% (or 0.21)** to find the federal income tax expense for 2022. - **Action:** \[ \text{Federal Income Tax Expense} = \text{Pre-Tax Income} \times 21\% \] --- ### **Final Answer:** **Federal Income Tax Expense for 2022 = Pre-Tax Income × 21%** > *Make sure to use the actual pre-tax income from your 2022 income statement to complete the calculation!*

Let's proceed with the calculations step-by-step, assuming we have the pre-tax income figure from the 2022 income statement. --- ### **Step 1: Find the Pre-Tax Income for 2022** - **Explanation:** From the 2022 income statement in the Custom reports tab, identify the amount listed as **"Income Before Income Taxes"** or similar. *For this example, let's assume the pre-tax income is $150,000.* *(Replace this figure with the actual pre-tax income from your report when performing the calculation.)* --- ### **Step 2: Calculate Federal Income Tax Expense** - **Calculation:** \[ \text{Federal Income Tax Expense} = 150,000 \times 0.21 = 31,500 \] - **Explanation:** Multiply the pre-tax income ($150,000) by the federal corporate tax rate (21%) to determine the income tax expense for 2022. --- ### **Final Answer:** **Federal Income Tax Expense for 2022 = $31,500** *(Replace $150,000 with the actual pre-tax income from your income statement to get the precise tax expense.)*

Certainly! Here is a detailed 3-step process with explanations and calculations: --- ### **Step 1: Find the Pre-Tax Income from the Income Statement** - **Explanation:** Review the 2022 income statement in the Custom reports tab and identify the **"Income Before Income Taxes"** amount. This figure represents the company's earnings before income tax expenses are deducted. *For illustration, assume the pre-tax income is $150,000.* *(Use the actual figure from your income statement when performing the calculation.)* --- ### **Step 2: Calculate the Federal Income Tax Expense** - **Explanation:** The federal corporate income tax rate is **21%**. To determine the tax expense, multiply the pre-tax income by 21%. \[ \text{Tax Expense} = \text{Pre-Tax Income} \times 0.21 \] Using the assumed pre-tax income: \[ 150,000 \times 0.21 = 31,500 \] --- ### **Step 3: Record the Journal Entry for Federal Income Taxes Payable** - **Explanation:** The journal entry involves debiting the **Federal Income Tax Expense (A/C #40700)** and crediting **Federal Income Taxes Payable (A/C #20800)** with the calculated tax amount. \[ \text{Journal Entry:} \text{Debit:} \quad \text{Federal Income Tax Expense} \quad \$31,500 \\ \text{Credit:} \quad \text{Federal Income Taxes Payable} \quad \$31,500 \] --- ### **Final Summary:** - **Pre-Tax Income (assumed):** \$150,000 - **Federal Income Tax Expense:** \$31,500 *(Replace the assumed pre-tax income with the actual figure from your report to get the precise tax expense.)*