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On 1 January 20X3, Highmark Corp. had the following deferred tax balances: Deferred income tax asset related to warranty Deferred income tax liability related to capital assets $ 16,000 $120,000 On this date, the net book value of capital assets was $1,750,000 and UCC was $1,450,000. There was a warranty liability of $40,000 In 20X3, accounting income was $170,000. This included non-tax-deductible expenses of $42,000, dividend revenue (non-taxable) of $12,000, depreciation of $75,000, and a warranty expense of $39,000. Warranty claims paid were $51,000 and CCA was $99.000. Required: Provide the journal entry to record tax expense in 20x3. The enacted tax rate was 41% in 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 20X3 Answer is complete but not entirely correct. General Journal Income tax expense Deferred income tax Income tax payable 100 Debit 82.000 Credit 14,760 67,240

On 1 January 20X3, Highmark Corp. had the following deferred tax balances: Deferred income tax asset related to warranty Deferred income tax liability related to capital assets $ 16,000 $120,000 On this date, the net book value of capital assets was $1,750,000 and UCC was $1,450,000. There was a warranty liability of $40,000 In 20X3, accounting income was $170,000. This included non-tax-deductible expenses of $42,000, dividend revenue (non-taxable) of $12,000, depreciation of $75,000, and a warranty expense of $39,000. Warranty claims paid were $51,000 and CCA was $99.000. Required: Provide the journal entry to record tax expense in 20x3. The enacted tax rate was 41% in 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 20X3 Answer is complete but not entirely correct. General Journal Income tax expense Deferred income tax Income tax payable 100 Debit 82.000 Credit 14,760 67,240

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On 1 January 20X3, Highmark Corp. had the following deferred tax balances: $ 16,000 $120,000 Deferred income tax asset related to warranty Deferred income tax liability related to capital assets On this date, the net book value of capital assets was $1,750,000 and UCC was $1,450,000. There was a warranty liability of $40,000 In 20X3, accounting income was $170,000. This included non-tax-deductible expenses of $42,000, dividend revenue (non-taxable) of $12,000, depreciation of $75,000, and a warranty expense of $39,000. Warranty claims paid were $51,000 and CCA was $99,000 Required: Provide the journal entry to record tax expense in 20X3. The enacted tax rate was 41% in 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 20X3 Answer is complete but not entirely correct. General Journal Income tax expense Deferred income tax Income tax payable 000 Debit 82.000 Credit Re 14,760 67,240
Transcribed Image Text:On 1 January 20X3, Highmark Corp. had the following deferred tax balances: $ 16,000 $120,000 Deferred income tax asset related to warranty Deferred income tax liability related to capital assets On this date, the net book value of capital assets was $1,750,000 and UCC was $1,450,000. There was a warranty liability of $40,000 In 20X3, accounting income was $170,000. This included non-tax-deductible expenses of $42,000, dividend revenue (non-taxable) of $12,000, depreciation of $75,000, and a warranty expense of $39,000. Warranty claims paid were $51,000 and CCA was $99,000 Required: Provide the journal entry to record tax expense in 20X3. The enacted tax rate was 41% in 20X3. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) No 1 Date 20X3 Answer is complete but not entirely correct. General Journal Income tax expense Deferred income tax Income tax payable 000 Debit 82.000 Credit Re 14,760 67,240
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