Taxable income and pretax financial income would be identical for Blue Co. except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared.Taxable income202420252026Excess of revenues over expenses (excluding two temporary differences) $154,000$191.000$88,100Installment gross profit collected8,5008,5008,500Expenditures for warrantiesTaxable income(4,500)$158,000(4,500)$195,000(4,500)$92,100Pretax financial income202420252026Excess of revenues over expenses (excluding two temporary differences)Installment gross profit recognized$154,000$191,000$88,10025,500-0--0-Estimated cost of warrantiesIncome before taxes(13,500)$166,000-0--0-$191,000$88,100The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years.Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entryfor the account titles and enter O for the amounts.)DateAccount Titles and ExplanationDebitCredit

Deferred tax:The difference between the income recognition under income tax law and accounting…

Taxable income Excess of revenues over expenses (excluding two temporary differences) $154,000 Installment gross proft collected Expenditures for warranties Taxable income 2024 2025 2026 $191.000 $88,100 8.500 8.500 8,500 (4.500) (4500) (4.500) $158,000 $195,000 $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88.100 Installment gross profit recognized 25,500 -O Estimated cost of warranties (13,500) Income before taxes $166.000 $191.000 $88.100 The tax rates in effect are 2024, 20%: 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years

Taxable income Excess of revenues over expenses (excluding two temporary differences) $154,000 Installment gross proft collected Expenditures for warranties Taxable income 2024 2025 2026 $191.000 $88,100 8.500 8.500 8,500 (4.500) (4500) (4.500) $158,000 $195,000 $92,100 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $154,000 $191.000 $88.100 Installment gross profit recognized 25,500 -O Estimated cost of warranties (13,500) Income before taxes $166.000 $191.000 $88.100 The tax rates in effect are 2024, 20%: 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years

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 7C

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Taxable income and pretax financial income would be identical for Coronado 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 2019 2020 2021 Excess of revenues over expenses (excluding two temporary differences) $151,000 $207,000 $96,200 Installment gross profit collected 7,300 7,300 7,300 Expenditures for warranties (5,200 ) (5,200 ) (5,200 ) Taxable income $153,100 $209,100 $98,300 Pretax financial income 2019 2020 2021 Excess of revenues over expenses (excluding two temporary differences) $151,000 $207,000 $96,200 Installment gross profit recognized 21,900 -0- -0- Estimated cost of warranties (15,600 ) -0- -0- Income before taxes $157,300…
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…
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