J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate journal entry.
J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023. Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate journal entry.
Chapter26: Tax Practice And Ethics
Section: Chapter Questions
Problem 32P
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Question
J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty payments are expected to be in equal amounts over the next three years (2022–2024) and will be tax deductible at that time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023.
Determine the amounts necessary to record J-Matt’s income taxes for 2021 and prepare the appropriate
![J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference
between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty
payments are expected to be in equal amounts over the next three years (2022-2024) and will be tax deductible at that
time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023.
Determine the amounts necessary to record J-Matt's income taxes for 2021 and prepare the appropriate journal entry.
Complete this question by entering your answers in the tabs below.
General
Income Tax
Journal
Determine the amounts necessary to record J-Matt's income taxes for 2021.
Current tax payable](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f275d63-f5e6-4f8a-9771-deecce80c47d%2Ff072efde-1195-48c5-ba51-07cf8eae0de8%2Fuoecxs9_processed.png&w=3840&q=75)
Transcribed Image Text:J-Matt, Inc., had pretax accounting income of $331,000 and taxable income of $376,000 in 2021. The only difference
between accounting and taxable income is estimated product warranty costs of $45,000 for sales in 2021. Warranty
payments are expected to be in equal amounts over the next three years (2022-2024) and will be tax deductible at that
time. Recent tax legislation will change the tax rate from the current 25% to 20% in 2023.
Determine the amounts necessary to record J-Matt's income taxes for 2021 and prepare the appropriate journal entry.
Complete this question by entering your answers in the tabs below.
General
Income Tax
Journal
Determine the amounts necessary to record J-Matt's income taxes for 2021.
Current tax payable
![Prepare the appropriate journal entry. (Do not round intermediate calculations. If no entry is required for a transaction/event, sel
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1
Record the 2021 income tax expense.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f275d63-f5e6-4f8a-9771-deecce80c47d%2Ff072efde-1195-48c5-ba51-07cf8eae0de8%2F9x3rerh_processed.png&w=3840&q=75)
Transcribed Image Text:Prepare the appropriate journal entry. (Do not round intermediate calculations. If no entry is required for a transaction/event, sel
journal entry required" in the first account field.)
View transaction list
Journal entry worksheet
1
Record the 2021 income tax expense.
Note: Enter debits before credits.
Transaction
General Journal
Debit
Credit
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