Bramble Corp. had a Deferred Tax Asset account with a balance of $100,200 at the end of 2019 due to a single temporarydifference of $334,000 related to warranty liability accruals. At the end of 2020, this same temporary difference has increased to$368,500. Taxable income for 2020 is $919,000. The tax rate is 30% for all years.Assuming that it is more likely than not that $29,500 of the deferred tax asset will not be realized, prepare the journal entries torecord income taxes for 2020. Bramble uses a valuation allowance account. (Credit account titles are automatically indented whenthe amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for theamounts.)Year Account Titles and ExplanationDebitCredit2020(To record current tax expense)2020(To record deferred tax benefit)2020(To bring the deferred tax assetsaccount to its realizable value) In 2021, the company's prospects improved. While there was no change in the temporary deductible differences underlying theDeferred Tax Asset account, it was now considered more likely than not that the company would be able to make full use of thetemporary differences. Prepare the entry, if applicable, to adjust the Deferred Tax Asset and related account(s). (Credit accounttitles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for theaccount titles and enter O for the amounts.)Year Account Titles and ExplanationDebitCredit2021eTextbook and Media

Journal entries refers to the process of systematically documenting or recording the financial…

Bramble Corp. had a Deferred Tax Asset account with a balance of $100,200 at the end of 2019 due to a single temporary difference of $334,000 related to warranty liability accruals. At the end of 2020, this same temporary difference has increased to $368,500. Taxable income for 2020 is $919,000. The tax rate is 30% for all years. Assuming that it is more likely than not that $29,500 of the deferred tax asset will not be realized, prepare the journal entries to record income taxes for 2020. Bramble uses a valuation allowance account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Year Account Titles and Explanation Debit Credit 2020

Bramble Corp. had a Deferred Tax Asset account with a balance of $100,200 at the end of 2019 due to a single temporary difference of $334,000 related to warranty liability accruals. At the end of 2020, this same temporary difference has increased to $368,500. Taxable income for 2020 is $919,000. The tax rate is 30% for all years. Assuming that it is more likely than not that $29,500 of the deferred tax asset will not be realized, prepare the journal entries to record income taxes for 2020. Bramble uses a valuation allowance account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Year Account Titles and Explanation Debit Credit 2020

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 9DQ

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