journal entrie

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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The company’s trial balance is listed below. What are the journal entries that should be recorded for the Year 2 ASC 740 provision? There are two of them. Assume a tax rate of 40% and there are no state or foreign taxes to consider. The company is an accrual basis taxpayer. All work must be shown in a clear and organized format.

   Year 1 Year 2
Cash 19,400 48500
A/R 30,000 90000
Allowance for Bad Debt -5,000 -25000
Prepaid Supplies 500 1500
DTA (DTL) 2000 2000
A/P -15000 -45000
Income Tax Payable -14000 -
R/E - -17900
Revenue -50000 -100000
Political Contributions 100 900
Wages 15000 25000
Bad Debt 5000 20000
Income Tax Expense 12000 -
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