Answer
The journals shall be:
Income tax ..................................................67,500
..............Deferred tax .....................................................................................12,000
..............Income tax..........................................................................................55,000
Please see below workings.
Work Step by Step
Income tax payable = (225,000-40,000) *30% = 55,500
Deferred tax liability = (40,000*30%) = 12,000
Income tax expense = (55,500+12000) = 67,500
