The Jets company recorded a deffered tax liability in the amount of $18,750 on December 2020 due to the book value of equipment exceeding the tax basis of equipment by $75,000. The difference will reverse equally over the next three years. In late 2020 the enacted tax rate increased to 42.5% beginning of 2022. Determine the income tax rate that is the enacted rate for 2020. What journal entry should the Jets record to adjust the deferred tax liability, if any?

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 $80 million. At December 31, 2020, Lance reported a deferred tax asset of $461,000 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.

During 2020, Marigold Co.’s first year of operations, the company reports pretax financial income at $247,300. Marigold’s enacted tax rate is 45% for 2020 and 20% for all later years. Marigold expects to have taxable income in each of the next 5 years. The effects on future tax returns of temporary differences existing at December 31, 2020, are summarized as follows.     Future Years           2021   2022   2023   2024   2025   Total Future taxable (deductible) amounts:                                  Installment sales   $33,800        $33,800        $33,800                 $101,400       Depreciation   5,800      5,800      5,800   $5,800   $5,800   29,000       Unearned rent   (47,000)     (47,000)                 (94,000)       Complete the schedule below to compute deferred taxes at December 31, 2020. (Negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)…

At the beginning of 2021, Pitman Co. had pretax financial income of $1,200,000. Additionally, there was a timing difference of $300,000 due to an accounts receivable that will not be collected until the following year. The tax rate us 30%. A. Calculate the total taxable income for 2021. B. Calculate Income tax expense, income tax payable, and the deferred amount for 2021, and create the journal entry.