Ingersoll Rand, organized on January 2, 2021, had pretax accounting income of $6,300,000 and taxable income of $8,880,000 for the year ended December 31, 2021. The 2021 tax rate was 25%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows: 2022$860,000 30%2023 430,000 30%2024 430,000 30%2025 860,000 35% Required:Prepare one compound journal entry to record Ingersoll Rand's provision for taxes for the year 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

In this question, we have to pass the journal entry related to provisions for tax in the year 2019,…

Answered: Ingersoll Rand, organized on January 2,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ingersoll Rand, organized on January 2, 2021, had pretax accounting income of $6,300,000 and taxable income of $8,880,000 for the year ended December 31, 2021. The 2021 tax rate was 25%. The only difference between book and taxable income is estimated warranty costs. Expected payments and scheduled enacted tax rates are as follows:


2022	$	860,000	30	%
2023		430,000	30	%
2024		430,000	30	%
2025		860,000	35	%

Required:
Prepare one compound journal entry to record Ingersoll Rand's provision for taxes for the year 2021. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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