Early in January 2021, DeVille Company purchased machinery costing $700,000. For financial reporting purposes, DeVille Company has a December 31st year end and uses straight-line depreciation. DeVille estimates the useful life of this machinery to be four years with no residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% over the life of the machinery. Pretax accounting income for 2021 was $800,000, which includes interest revenue of $21,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%. Prepare the journal entry to record the 2021 provision for income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Early in January 2021, DeVille Company purchased machinery costing $700,000. For financial reporting purposes, DeVille Company has a December 31st year end and uses straight-line depreciation. DeVille estimates the useful life of this machinery to be four years with no residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% over the life of the machinery. Pretax accounting income for 2021 was $800,000, which includes interest revenue of $21,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%. Prepare the journal entry to record the 2021 provision for income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter18: Accounting For Income Taxes
Section: Chapter Questions
Problem 5MC: At the beginning of 2019, Conley Company purchased an asset at a cost of 10,000. For financial...
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Early in January 2021, DeVille Company purchased machinery costing $700,000. For financial reporting purposes, DeVille Company has a December 31st year end and uses straight-line depreciation. DeVille estimates the useful life of this machinery to be four years with no residual value. For tax purposes, the deduction is 40%, 30%, 20%, and 10% over the life of the machinery. Pretax accounting income for 2021 was $800,000, which includes interest revenue of $21,000 from municipal governmental bonds. Other than the two described, there are no differences between accounting income and taxable income. The enacted tax rate is 25%.
Prepare the journal entry to record the 2021 provision for income taxes. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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