Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid tosatisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty workis completed. At December 31, 2021, Lance has a warranty liability of $2 million and taxable income of $75million. At December 31, 2020, Lance reported a deferred tax asset of $471,000 related to this difference inreporting warranties, its only temporary difference. The enacted tax rate is 25% each year.Required:Prepare the appropriate journal entry to record Lance's income tax provision for 2021. (If no entry isrequired for a transaction/event, select "No journal entry required" in the first account field. Enter youranswers in whole dollars.)View transaction listJournal entry worksheet>Record 2021 income taxes.Note: Enter debits before credits.TransactionGeneral JournalDebitCredit1Record entryClear entryView general journal

Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Answered: Prepare the appropriate journal entry…

Business

Accounting

Prepare the appropriate journal entry to record Lance's income tax provision for 2021.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter18: Accounting For Income Taxes

Section: Chapter Questions

Problem 8E: Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a...

See similar textbooks

Related questions

Q: In 2019, state income taxes or state and local sales taxes, whichever is larger, may be deducted as…

A: The State and local taxes (SALT) deductions can only be claimed if a taxpayer chooses to itemize…

Q: Eligible taxpayers may qualify to take the full 20% deduction for Qualified Business Income (or 20%…

A: Taxable Income refers to the part of total income received by an individual or corporation which is…

Q: Rent payments that are processed through a third-party net work after March 11, 2021, should be…

A: GIVEN Rent payment that are proceed through a 3rd party network after March 11,2021 should be…

Q: Apply the tax benefit rule to determine the amount of the state income tax refund included in gross…

A: Given, Pete and Heather filed a Joint tax return in 2020. AGI = $90,000 Itemized deductions =…

Q: How are payments of alimony and separate maintenance under agreements and modifications finalized…

A: Alimony Payment - It is a payment between current or former spouses as the result of a marriage…

Q: What would be the balance of the deferred tax asset or deferred tax liability as at 30 June 2022

Q: How much in surtax will Mario and Tricia be assessed on their Form 1040 for 2020?

Q: Whether their taxable income in 2021 is? Eligible taxpayers may be allowed to claim the entire 20%…

A: Taxable Income refers to the part of total income received by an individual or corporation which is…

Q: What is Mohamed's taxable income for 2019, note that the personal allowance is £10,600,

A: The final amount of income over which the tax rate is charged for the tax liability is known as…

Q: ____________ is the return filing deadline for an individual taxpayer who has no self-employment or…

A: Every Taxpayer should submit the details of its income through filling the return and should also…

Q: What is the amount of income tax payable for 2019?

A: Income tax is a form of direct tax which is to be paid by the individual on income earned during the…

Q: Required: А. Calculate taxable income for 2020. В. Prepare the journal entry necessary to record…

A: Part A) Calculation of taxable income for 2020 A formulation for the above-

Q: X derived the following income in 2020, choose A if the income is subject to regular income tax, B…

A: Capital Gain on the Sale of stocks directly to Buyer : p 30000 Ordinary gain on sale of old…

Q: In 2020, Landon has self-employment earnings of $210,000.

A: Working note :- L's self employment earnings are $…

Q: Il income statement items are subject to a 25% income tax rate. In its 2021 income statement,…

A: Income tax Expense = Operating income x Income tax Rate Total Income tax Expense = (Operating income…

Q: Dora Burch files her 2020 income tax return on March 2, 2021. She receives a nil assessment on June…

A: As given Dora Burch prepares her tax return for the year 2020 on March 2, 2021. On June 3, 2021, she…

Q: Determine the Tax Credit Relief (if any) due to Professor Mohammed Ibrahim in the year 2019. The…

A: Tax credit relief is a form of tax relief that directly reduces the amount of tax owed(not taxable…

Q: Breifly outline the tax consequences of each of these four matters for the year end of 31 decemeber…

A: You have asked four matters which are the four sub-parts of the question kindly resubmit the…

Q: How much of the following amounts received in 2021 will be included in the tax return for the year…

A: Taxation refers to the imposition of compulsory financial obligations by the government on…

Q: Compute for the Income Tax Due and Payable for taxable year ended December 31, 2020 assuming that…

A: Income tax: Fees charged on the taxable income of the individual and the corporates by the…

Q: Which one of the following amounts represents the maximum amount that you may deduct for moving…

A: Moving expenses: These are the expenses associated related to your moving your household’s goods and…

Q: Complete the taxes section of Schedule A below to report Laura's 2021 deduction for taxes assuming…

A: Laura paid a total sum of $10,080 during the year for different tax liabilities arised on her.

Q: What is the amount of Maurice's net investment income tax for 2021?

A: As per section 1411 of the Internal revenue code a single filer is liable to pay net investment…

Q: Would education expenses incurred by a self-employed individual be allowed in 2021 for the following…

A: A self employed can deduct the cost of education required for his /her…

Q: What is the amount of income tax payable for 2019? What is the company's financial income subject…

A: Solution Concept Financial income is the income as per the income statement prepared by the company…

Q: What is Garrett's Income Tax Liability for 2020?

A: Garrett's Income Tax Liability for 2020: Total Income= $36,900 (27,000+2,000+7,900) Itemized…

Q: In 2020, depending on the amounts of income and other tax information, some individuals may report…

A: Depending on the amounts of income and other tax information, some individuals may report their…

Q: Calculate taxable income and taxes payable for 2020. Taxable income Income taxes payable eTextbook…

A: The question is based on the concept of Taxation.

Q: Required: Use the following information to complete Rhonda Hill's federal income tax return. If any…

A: A federal Income Tax return is a return by individuals and firms for reporting their income to the…

Q: Calculate the amount of the child and dependent care credit allowed before any tax liability…

A: The credit of the child and dependent care refers to the tax credit which helps the taxpayer in…

Q: Norman Foster filed his 2020 tax return as was required on June 15, 2021. His Notice of Assessment…

A: The “notice of objection” can be filed by the taxpayers if they found that the mail they received is…

Q: peg. on to view the additional information.) e Income and Part I Federal Tax Payable for the Sebago…

A: Taxable income refers to the total sum of money earned by an entity that is subject to the mandatory…

Q: Pedro is about to prepare and file his annual income tax return for the year ending December 21,…

A: Tax is a charge which is charged on the taxable income of a taxpayer and this tax amount has to be…

Q: Compute the net tax payable or refund due for Tim and Sarah Lawrence for 2019.

A: step 1: Taxable income:

Q: i and Ali to apply for the tax return of three months. Is it correct? If not, then sp

A: A tax deduction is declared by the taxable assessee for which the tax is being determined and he…

Q: Determine the amount of taxable income/(loss) for the year 2020.

A: Particulars Amount Dividend - NRFC 40,000 Royalty 80,000 Income from other sources 120,000…

Q: n 2021. What is the minimum total F the tax instalments required for

A: Taxpayers are allowed for deductions of investment expenses and miscellaneous itemized deductions…

Q: Required (a) Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019…

Q: s enacted tax rate is 23% for 2017, and 27% for 2018. mount should ABC report in its 2017 balance…

A: Solution: Deferred tax liability is created for taxable temporary differences that results in future…

Q: Calculate Mrs Derald tax payable or refund for the year 2021.

A: Given in the question: Earnings $100,000 Earned Income from Shares $5,100 Tax Year…

Q: Under accrual method, what is the income before taxes should Iniwan report in its December 31, 2020?…

A: Accrual basis income before taxes is the income which a company has earned during the year as per…

Q: (a) Calculate the current and deferred tax of Bright Star Ltd for each year, 2018 and 2019 (b)…

A: (a) Formulation Computation

Q: List the required employee payroll withholding deductions, and provide the tax rate for each.

A: Payroll withholding deduction: The amounts which the employer withheld from employees’ gross pay to…

Q: 2019 TAX TABLE Determine the tax liability, marginal tax rate, and average tax rate in each of the…

A: Tax liability : Tax liability is the amount of taxation that a business or an individual incurs…

Q: Required: A. Calculate taxable income for 2020.

Q: Required: Determine the tax effect of the transactions that took place during 2020 and 2021 on Mr.…

A: At the time of exercise : When the employee has exercised the option, (agreed to buy) : the…

Q: What are the 2019 tax rates for FICA Social Security and FICA Medicare? What are the 2019 maximum…

A: Involuntary deductions are mandatory deductions from an employee's gross pay, due to application of…

Q: Required: How would the preceding information affect the calculation of Olivia Smith's business…

A: Business Income Calculation of the business income add up all the revenues which are received and…

Q: Annie files her 2020 tax return on April 15, 2021. On what date will the Statute of Limitations on…

A: As per Internal Revenue Service, If tax return due on April 15 if it files such return early or…

Q: Real estate tax, 2020 state balance due paid in 2021, personal property tax.

Concept explainers

Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.

Question

Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to
satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work
is completed. At December 31, 2021, Lance has a warranty liability of $2 million and taxable income of $75
million. At December 31, 2020, Lance reported a deferred tax asset of $471,000 related to this difference in
reporting warranties, its only temporary difference. The enacted tax rate is 25% each year.
Required:
Prepare the appropriate journal entry to record Lance's income tax provision for 2021. (If no entry is
required for a transaction/event, select "No journal entry required" in the first account field. Enter your
answers in whole dollars.)
View transaction list
Journal entry worksheet
>
Record 2021 income taxes.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
1
Record entry
Clear entry
View general journal

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

How do the all events and economic performance requirements apply to the following transactions by an accrual basis taxpayer? a. The company guarantees its products for six months. At the end of 2019, customers had made valid claims for 600,000 that were not paid until 2020. Also, the company estimates that another 400,000 in claims from 2019 sales will be filed and paid in 2020. b. The accrual basis taxpayer reported 200,000 in corporate taxable income for 2019. The state income tax rate was 6%. The corporation paid 7,000 in estimated state income taxes in 2019 and paid 2,000 on 2018 state income taxes when it filed its 2018 state income tax return in March 2019. The company filed its 2019 state income tax return in March 2020 and paid the remaining 5,000 of its 2019 state income tax liability. c. An employee was involved in an accident while making a sales call. The company paid the injured victim 15,000 in 2019 and agreed to pay the victim 15,000 a year for the next nine years.
In the current year, Madison Corporation had 50,000 of taxable income at a tax rate of 25%. During the year, Madison began offering warranties on its products and has a Warranty liability for financial reporting purposes of 5,000 at the end of the year. Warranty expenses are not deductible until paid for income tax purposes. Prepare the journal entry to record Madisons income taxes at the end of the year.
Incomc Taxes Then Company has been in operation for several years. It has both a deductible and a taxable temporary difference. At the beginning of 2019, its deferred tax asset was 690, and its deferred tax liability was 750. The company expects its lutine deductible amount to be deductible in 2020 and its Inline taxable amount to 1 taxable in 2021. In 2018, Congress enacted income tax rates for future years as follows: 2019, 30%; 2020, 34%; and 2021, 35%. At the end of 2019, Then reported income taxes payable of 25,800, an increase in its deferred tax liability of 300, and an ending balance in its deferred tax asset of 860. Thun has prepared the following schedule of items related to its income taxes for 2019. Required: Fill in the blanks in the preceding schedule. Show your calculations.
Quince Corporation has taxable income of $485,000 for its calendar tax year. Calculate the corporation's income tax liability for 2019 before tax credits. $________________
Ironwood Corporation has ordinary taxable income of $65,000 in 2019, and a short-term capital loss of $15,000. What is the corporation's tax liability for 2019? $7,500 $5,250 $10,500 $13,650 None of the above