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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.

FINANCIAL ACCOUNTING
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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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. 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
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
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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