(b) Deferred Tax Liability eTextbook and Media List of Accounts - Your answer is partially correct. Indicate how deferred income taxes will be reported on the balance sheet at the end of 2024. Noncurrent Liabilities Deferred Tax Liability eTextbook and Media List of Accounts BLOSSOM INC. Balance Sheet December 31, 2024 20414 20414 Attempts: 2 of 3 used Blossom Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2024. Book Basis Tax Basis Equipment (net) $414,000 $352,900 Estimated warranty liability 182,000 It is estimated that the warranty liability will be settled in 2025. The difference in equipment (net) will result in taxable amounts of $20,500 in 2025, $31,600 in 2026, and $9,000 in 2027. The company has taxable income of $515,000 in 2024. As of the beginning of 2024, the enacted tax rate is 34% for 2024-2026, and 30% for 2027. Blossom expects to report taxable income through 2027. (a) Your answer is correct. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability Debit 133634 61880 Credit 175100 20414
(b) Deferred Tax Liability eTextbook and Media List of Accounts - Your answer is partially correct. Indicate how deferred income taxes will be reported on the balance sheet at the end of 2024. Noncurrent Liabilities Deferred Tax Liability eTextbook and Media List of Accounts BLOSSOM INC. Balance Sheet December 31, 2024 20414 20414 Attempts: 2 of 3 used Blossom Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and liabilities at the end of 2024. Book Basis Tax Basis Equipment (net) $414,000 $352,900 Estimated warranty liability 182,000 It is estimated that the warranty liability will be settled in 2025. The difference in equipment (net) will result in taxable amounts of $20,500 in 2025, $31,600 in 2026, and $9,000 in 2027. The company has taxable income of $515,000 in 2024. As of the beginning of 2024, the enacted tax rate is 34% for 2024-2026, and 30% for 2027. Blossom expects to report taxable income through 2027. (a) Your answer is correct. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Account Titles and Explanation Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability Debit 133634 61880 Credit 175100 20414
Chapter12: Tax Credits And Payments
Section: Chapter Questions
Problem 23P
Related questions
Question
Transcribed Image Text:(b)
Deferred Tax Liability
eTextbook and Media
List of Accounts
- Your answer is partially correct.
Indicate how deferred income taxes will be reported on the balance sheet at the end of 2024.
Noncurrent Liabilities
Deferred Tax Liability
eTextbook and Media
List of Accounts
BLOSSOM INC.
Balance Sheet
December 31, 2024
20414
20414
Attempts: 2 of 3 used
Transcribed Image Text:Blossom Inc., in its first year of operations, has the following differences between the book basis and tax basis of its assets and
liabilities at the end of 2024.
Book Basis
Tax Basis
Equipment (net)
$414,000
$352,900
Estimated warranty liability
182,000
It is estimated that the warranty liability will be settled in 2025. The difference in equipment (net) will result in taxable amounts of
$20,500 in 2025, $31,600 in 2026, and $9,000 in 2027. The company has taxable income of $515,000 in 2024. As of the beginning of
2024, the enacted tax rate is 34% for 2024-2026, and 30% for 2027. Blossom expects to report taxable income through 2027.
(a)
Your answer is correct.
Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2024. (List all debit
entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is
required, select "No Entry" for the account titles and enter O for the amounts.)
Account Titles and Explanation
Income Tax Expense
Deferred Tax Asset
Income Tax Payable
Deferred Tax Liability
Debit
133634
61880
Credit
175100
20414
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning