Streamlining the Annual Income Tax Provision Process for Leap

Leap Industries, Inc. Narrative Description of Annual Income Tax Provision Process July 15, 2016 In October: Angela Moss prepares an analysis comparing the recently filed income tax returns to the income tax provision for the same period. Sterling Wright reviews this worksheet and prepares a journal entry adjusting current taxes payable (receivable), deferred tax assets (liabilities), and current and deferred tax expense to reflect the provision to return differences for the prior year. Sterling submits this journal entry to the accounting department to be recorded. In January: Angela Moss and Sterling Wright download the trial balance and prepare the current year book/tax differences. Sterling Wright enters all the book/tax differences into an Excel worksheet that he uses to calculate the current tax expense based on a weighted average federal and state tax rate.