1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Shkiper50 [21]
3 years ago
10

Warranty costs in the amount of $500,000 were recorded on the 2018 Income statement. However, the warranty tax deduction is not

allowed until payment occurs in future years.
Business
1 answer:
netineya [11]3 years ago
4 0

Answer:

Lets shape the question so it makes some sense.

<em>Warranty costs amounting $500,000 were recorded in 2018 Income statement. However, the warranty tax deduction is not allowed until payment occurs in future years. Disscuss accouting implication</em>

See detail answer below.

Explanation:

As per tax laws warranty provision is not allowed as deductible expense only warranty cost incured/paid during the year is allowed deduction when computing taxable income.

So the company shall recoginze defferd tax asset for this expense in current year. Following entries will be made by the company for financial accounting purpose.

Deffered Tax Asset Debit    $125000

Deffered Tax Income            $125000

(Assuming applicable tax rates is 25%)

The next year when the warranty claim will be incured/paid the company will reverse the above entry and can claim tax deduction against this waranty cost paid but not on provision basis.

You might be interested in
Debbie sells fancy apples at the farmer's market each saturday. a dozen apples sell for $25. debbie pays $1.75 for each apple. w
marishachu [46]
33 cents or 0.33 dolars
6 0
3 years ago
Bachelor’s degrees are typically earned in _____.
WARRIOR [948]

Answer:

A bachelor degree is typically earned between 3 and 4 years. Many schools require students to complete about 40 courses or 120 credit hours.

8 0
2 years ago
Read 2 more answers
Gray is a 50% partner in Fabco Partnership. Gray's tax basis in Fabco on January 1, year 4, was $5,000. Fabco made no distributi
arsen [322]

Answer:

$21000

Explanation:

To determine Gray’s tax basis  for a 50% interest in the Fabco Partnership, The interest is increased by the partner’s  distributive share of all partnership items of income and decreased by the partner’s distributive share of all loss and  deduction items.

Gray’s beginning basis = $5,000  

Gray’s 50% distributive share of ordinary  income = 50% × $20000 = $10000

Gray’s 50% tax-exempt income= 50% × $8000 = $4,000 and  

portfolio income = 50% × $4000  = $2,000

Therefore, the ending basis of  Gray’s Fabco partnership interest = $5000 + $10000 + $4000 + $2000 = $21000

6 0
3 years ago
What are the consequences to the schedule if completion of a primary task is delayed?
Licemer1 [7]
A I think dont trust me though but i think a
4 0
3 years ago
Read 2 more answers
During the ________ of the product life cycle, the growth of a product begins to plateau, and the company must take advantage of
natulia [17]

Answer:

During the growth stage of the product life cycle, the growth of a product begins to plateau, and the company must take advantage of economies of scale and marketing messages and promotions that seek to remind customers about a great product, differentiate from competitors, and reinforce brand loyalty.

Explanation:

Hope this helped

4 0
2 years ago
Other questions:
  • In order to assure better management acceptance, the flow of input data for budgeting should begin with the
    9·1 answer
  • TRUE OR FALSE FOR BRAINLIEST ANSWER Principals are responsible for the contracts, but not the personal injury claims, created by
    8·1 answer
  • Land Transactions on the Statement of Cash Flows Alpha Corporation purchased land for $211,000. Later in the year, the company s
    14·1 answer
  • Incident resource information management systems are used to collect, update, and process data; track resources; and:
    6·1 answer
  • Which action is specifically recommended to enhance your credibility in the field of accounting?
    8·2 answers
  • The acid-test (quick) ratio A. relates cash, short-term investments, and net receivables to current liabilities. B. is calculate
    11·1 answer
  • A company's flexible budget for 16,000 units of production showed sales, $96,000; variable costs, $56,000; and fixed costs, $20,
    5·1 answer
  • Yekutia has the resources to manufacture 320 motorcycles or 570 lawn-mowers per year. The country of Bezanitia, has the capabili
    9·1 answer
  • . If you are in a position to advise a Western company that was considering doing business in Saudi Arabia for the first time, w
    10·1 answer
  • Near an ocean beach, a high-rise building is being constructed that will block the scenic view of the ocean by the residents of
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!