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zysi [14]
3 years ago
10

Taxable income and pretax financial income would be identical for Skysong Co. except for its treatments of gross profit on insta

llment 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) $148,000 $227,000 $96,400 Installment gross profit collected 8,400 8,400 8,400 Expenditures for warranties (5,500 ) (5,500 ) (5,500 ) Taxable income $150,900 $229,900 $99,300 Pretax financial income 2019 2020 2021 Excess of revenues over expenses (excluding two temporary differences) $148,000 $227,000 $96,400 Installment gross profit recognized 25,200 -0- -0- Estimated cost of warranties (16,500 ) -0- -0- Income before taxes $156,700 $227,000 $96,400 The tax rates in effect are 2019, 40%; 2020 and 2021, 45%. All tax rates were enacted into law on January 1, 2019. No deferred income taxes existed at the beginning of 2019. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, 2020, and 2021.
Business
1 answer:
Veseljchak [2.6K]3 years ago
3 0

Answer:

Explanation:

This question was computed in an Excel SOlver and the result are shown below:

Date                Particulars                           Debit($)          Credit($)

31-Dec-19       Income tax expense         62970

                      Deferred tax asset               4950

                     Income taxes payable                                  60360

                      Deferred tax  liability                                     7560

             (To record income tax expense

              for the year)

31-Dec-20       Income tax expense         102150

                     Deferred tax asset                 3780

                     Income taxes payable                                  103455

                      Deferred tax  asset                                          2475

             (To record income tax expense

              for the year)

31-Dec-21    Income  tax expense           43380

                   Deferred tax liability                3780

                  Income taxes payable                                     44685

                  Deferred tax Asset                                            2475

               (TO record income tax  expense

                 for the year)

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Apr. 2 Purchased merchandise from Lyon Company under the following terms: $4,600 price, invoice dated April 2, credit terms of 2
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5 0
3 years ago
On June 30, 2018, Baird Company’s total current assets were $502,000 and its total current liabilities were $274,000. On July 1,
amm1812

Answer:

Before issuing the note

Current ratio

= <u>Current assets</u>

   Current liabilities

= <u>$502,000</u>

  $274,000

= 1.83: 1

After issuing the note

Current ratio

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Explanation:

Current ratio is the ratio of current assets to current liabilities. Before issuing the note, current assets amounted to $502,000 while current liabilities were $274,000. After issuing the note, current assets increased to $538,400 as a result of $39,400 received on note issue. This increases the current ratio from 1.83 to 1.96.

7 0
3 years ago
A project requires a purchase of $1,000,000 in equipment, inventory will increase by $200,000, and accounts payable will increas
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Answer:

The aggregate investment of the project is $1,000,000

Explanation:

Total or the aggregate investment is the term which is described as the amount of money which a person or a company needed or required to complete the task, work or the project.

In this situation, the project needed a purchase of equipment which is worth $1,000,000 due to which there is increase in inventory as well as increase in accounts payable. Therefore, the total investment amounts to $1,000,000.As the equipment is the necessary item in order to complete the project and due to which the inventory rise and also the equipment is purchased on credit because of which the accounts payable also increase.

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3 years ago
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