Answer:
Date Account title Debit Credit
12/31/2021 Income tax expense $3,060,000
Deferred tax asset $ 969,000
Income tax payable $4,029,000
Explanation:
2021 Income tax expense from warranty costs:
= Taxable income - Pretax accounting income
= 10,160,000 - 7,100,000
= $3,060,000
Tax on the warranty payments will be treated as deferred tax assets so the total is:
= (1,020,000 * 30%) + (510,000 * 30%) + (510,000 * 30%) + (1,020,000 * 35%)
= $969,000
