Question

Mitchell Corporation had income before income taxes of \(195,000 in 2017. Mitchell’s current income tax expense is \)48,000, and deferred income tax expense is $30,000. Prepare Mitchell’s 2017 income statement, beginning with Income before income taxes.

Short answer

Theincome statementrecords theincome tax expenseof the firm that is incurred for theprevious financial year. The amount oftotal income tax expenseisdeductedfrom thefirm's total incometo calculate thenet income or loss.

Step-by-step solution

Given the amounts as

Particulars	Amount
Income before income tax for 2017	$195,000
Current income tax	$48,000
Deferred income tax expense	$30,000

Preparation of the income statement for 2017

Mitchell Corporation
Income Statement
Particulars		Amount
Income before income taxes		$195,000
Income tax expense
Current income tax	$48,000
Add: Deferred income tax	$30,000
Total income tax expense		$78,000
Net income/loss		$117,000