Taxable income and pretax financial income would be identical for Marin Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) $154,000 $215,000 $93,500 Installment gross profit collected 8,500 8,500 8,500 Expenditures for warranties (5,500 ) (5,500 ) (5,500 ) Taxable income $157,000 $218,000 $96,500 Pretax financial income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) $154,000 $215,000 $93,500 Installment gross profit recognized 25,500 0 0 Estimated cost of warranties (16,500 ) 0 0 Income before taxes $163,000 $215,000 $93,500 The tax rates in effect are 2016, 40%; 2017 and 2018, 45%. All tax rates were enacted into law on January 1, 2016. No deferred income taxes existed at the beginning of 2016. Taxable income is expected in all future years.Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018.
Taxable income and pretax financial income would be identical for Marin Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) $154,000 $215,000 $93,500 Installment gross profit collected 8,500 8,500 8,500 Expenditures for warranties (5,500 ) (5,500 ) (5,500 ) Taxable income $157,000 $218,000 $96,500 Pretax financial income 2016 2017 2018 Excess of revenues over expenses (excluding two temporary differences) $154,000 $215,000 $93,500 Installment gross profit recognized 25,500 0 0 Estimated cost of warranties (16,500 ) 0 0 Income before taxes $163,000 $215,000 $93,500 The tax rates in effect are 2016, 40%; 2017 and 2018, 45%. All tax rates were enacted into law on January 1, 2016. No deferred income taxes existed at the beginning of 2016. Taxable income is expected in all future years.Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2016, 2017, and 2018.
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 12P: Comprehensive Colt Company reports pretax financial income of 143,000 in 2019. In addition to pretax...
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Taxable income and pretax financial income would be identical for Marin Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared.
|
Taxable income
|
2016
|
2017
|
2018
|
||||||
| Excess of revenues over expenses (excluding two temporary differences) |
$154,000
|
$215,000
|
$93,500
|
||||||
| Installment gross profit collected |
8,500
|
8,500
|
8,500
|
||||||
| Expenditures for warranties |
(5,500
|
)
|
(5,500
|
)
|
(5,500
|
)
|
|||
| Taxable income |
$157,000
|
|
$218,000
|
|
$96,500
|
|
|||
|
Pretax financial income
|
2016
|
2017
|
2018
|
||||||
| Excess of revenues over expenses (excluding two temporary differences) |
$154,000
|
$215,000
|
$93,500
|
||||||
| Installment gross profit recognized |
25,500
|
0
|
0
|
||||||
| Estimated cost of warranties |
(16,500
|
)
|
0
|
|
0
|
|
|||
| Income before taxes |
$163,000
|
|
$215,000
|
|
$93,500
|
|
The tax rates in effect are 2016, 40%; 2017 and 2018, 45%. All tax rates were enacted into law on January 1, 2016. No
Prepare the
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