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 1Year 2Cash19,40048500A/R30,00090000Allowance for Bad Debt-5,000-25000Prepaid Supplies5001500DTA (DTL)20002000A/P-15000-45000Income Tax Payable-14000-R/E--17900Revenue-50000-100000Political Contributions100900Wages1500025000Bad Debt500020000Income Tax Expense12000- 00

The two journal entries that are to be recorded for the year 2 - ASC 740 provision are: 1. The tax…

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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	-
	0	0