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PSYCHO15rus [73]
3 years ago
12

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 $75 million. At December 31, 2020, Lance reported a deferred tax asset of $435,000 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.
Business
1 answer:
seropon [69]3 years ago
3 0

Answer:

Dr. Income Tax Expense $18,815,000

Cr. Deferred Tax Asset $65,000

Cr. Income Tax Payable $18,750,000

Explanation:

Preparation of appropriate journal entry to record Lance.

Dr. Income Tax Expense $18,815,000

($18,750,000+$65,000)

Cr. Deferred Tax Asset $65,000

[($2 million*25%)-435,000]

Cr. Income Tax Payable $18,750,000

($75,000,000*0.25)

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Velocity, a consulting firm, enters into a contract to help Burger Boy, a fast-food restaurant, design a marketing strategy to c
romanna [79]

Answer:

the journal entries:

to record the contract

Dr Accounts receivable 96,000

Dr Bonus receivable 2,400

    Cr Service revenue 98,400

to record adjustment of bonus receivable at month 5:

Dr Service revenue 6,400

    Cr Bonus receivable 6,400

to record service revenue for the fifth month:

Dr Accounts receivable 96,000

Dr Bonus receivable 800

    Cr Service revenue 96,800

to record getting the bonus:

Dr Cash 32,000

    Cr Bonus receivable 6,400

    Cr Service revenue 25,600

Explanation:

total value of the contract:

[($96,000 x 8) + $32,000] x 0.8 = $640,000

[($96,000 x 8) - $32,000] x 0.2 = $147,200

total expected value = $787,200

expected value of the bonus = $787,200 - ($96,000 x 8) = $19,200, monthly bonus receivable $19,200 / 8 = $2,400

the adjustments required during the fifth month:

[($96,000 x 8) + $32,000] x 0.6 = $480,000

[($96,000 x 8) - $32,000] x 0.4 = $294,400

total expected value = $774,400

expected value of the bonus = $774,400 - ($96,000 x 8) = $6,400, monthly bonus receivable $6,400 / 8 = $800

5 0
3 years ago
what are the intangible property that is protected by law which an enterpreneur should consider when starting up a business​
Amanda [17]

Answer:

Several types of intanigle property, also known as intangible assets, are protected by law. The three main types are: copyrights, patents, and trademarks.

A copyright is a protection of a creative work like a book, a song, or a film

A patent is a legal protection for a scientific or technological invetion.

And a trademark is a protection of a phrase, name, brand, or symbol that identifies a particular company.

8 0
3 years ago
What is an externality? someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway
vlabodo [156]

An externality is defined as the cost or benefit that affects a group when the group did not choose to receive that cost or benefit. This results in either a position or negative consequence based on what happened to a third party that was not origionally involved.

Someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway is the best definition given to be the answer to this question.

3 0
3 years ago
The statement of cash flows for Baldwin Company shows what happens in the Cash account during the year. It can be seen as a summ
Fynjy0 [20]

Answer:

d) It is a use of cash, and will be shown in the investing section as a subtraction.

Explanation:

The plant improvements will result in cash outflow and is to be considered as an investing activity and not financing activity. It is not a source of cash. So, this option is incorrect.

There will be cash outflows when a company makes plant improvements. It is reported under the investing activity and not under financing activity. So, this option is incorrect.

There will be cash usage when their plant improvements. It is not a source of cash which does not result in cash inflows. So, this option is incorrect.

6 0
3 years ago
PC Bell, a computer manufacturer that sells computer systems directly to customers, buys a computer chip for $180, software for
Colt1911 [192]

Answer:

Price at which this system is sold is $1,980

so correct option is B. $1,980

Explanation:

given data

computer chip = $180

software = $350

printer = $50

value added = $1,400

to find out

price at which the system is sold

solution

Price at which this system is sold is

system is sold = computer chip + software  + printer + value added

so

Price at which this system is sold is = $180 + $350 + $50 + $1,400

Price at which this system is sold is $1,980

so correct option is B. $1,980

3 0
3 years ago
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