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E19-17B (Two Temporary Differences, Tracked through 3 Years, Multiple Rates)Taxable income and pretax financial income would be identical for Ursula Co. except for its depreciation on equipment purchased in 2014 for $500,000 and estimated costs of warrant

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E19-17B (Two Temporary Differences, Tracked through 3 Years, Multiple Rates)Taxable income and pretax financial income would be identical for Ursula Co. except for its depreciation on equipment purchased in 2014 for $500,000 and estimated costs of warranties. The following income computations have been prepared.;Taxable income 2014 2015 2016;Excess of revenues over expenses;(excluding two temporary differences) $ 265,000 $ 630,000 $ 250,000;Tax Depreciation (125,000) (200,000) (175,000);Expenditures for warranties (10,000) (50,000) (15,000);Taxable income $ 130,000 $ 380,000 $ 60,000;Pretax financial income 2014 2015 2016;Excess of revenues over expenses;(excluding two temporary differences) $ 265,000 $ 630,000 $ 250,000;Book depreciation (100,000) (100,000) (100,000);Estimated cost of warranties (75,000) ?0? ?0?;Income before taxes $ 90,000 $ 530,000 $ 150,000;The tax rates in effect are: 2014 and 2015, 30%, 2016 and thereafter, 40%. All tax rates were enacted into law on January 1, 2014. No deferred income taxes existed at the beginning of 2014. Taxable income is expected in all future years.;Instructions;Prepare the journal entry to record income tax expense, deferred income taxes, and income tax payable for 2014, 2015, and 2016.

 

Paper#75297 | Written in 18-Jul-2015

Price : $27
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