Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2024, Lance has a warranty liability of $2 million and taxable income of $85 million. At December 31, 2023, Lance reported a deferred tax asset of $475,000 related to this difference in reporting warranties; it's only temporary difference. The enacted tax rate is 25% each year. Required: Prepare the appropriate journal entry to record Lance's income tax provision for 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. View transaction list Journal entry worksheet < 1 Record 2024 income taxes. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit >
Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2024, Lance has a warranty liability of $2 million and taxable income of $85 million. At December 31, 2023, Lance reported a deferred tax asset of $475,000 related to this difference in reporting warranties; it's only temporary difference. The enacted tax rate is 25% each year. Required: Prepare the appropriate journal entry to record Lance's income tax provision for 2024. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in whole dollars. View transaction list Journal entry worksheet < 1 Record 2024 income taxes. Note: Enter debits before credits. Transaction 1 General Journal Debit Credit >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Subject - account
Transcribed Image Text:Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its
product sales. For tax purposes, the expense is deducted when the warranty work is completed. At December 31, 2024, Lance has a
warranty liability of $2 million and taxable income of $85 million. At December 31, 2023, Lance reported a deferred tax asset of
$475,000 related to this difference in reporting warranties; it's only temporary difference. The enacted tax rate is 25% each year.
Required:
Prepare the appropriate journal entry to record Lance's income tax provision for 2024.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers
in whole dollars.
View transaction list
Journal entry worksheet
< 1
Record 2024 income taxes.
Note: Enter debits before credits.
Transaction
1
General Journal
Debit
Credit
>
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