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Pharoah Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $849,000 $883,000 $961,000 Excess depreciation expense on tax return (30,800) (38,900) (10,300) Excess warranty expense in financial income Taxable income 21,000 9,600 8,000 $839,200 $853,700 $958,700 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit 2025 Credit

Pharoah Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $849,000 $883,000 $961,000 Excess depreciation expense on tax return (30,800) (38,900) (10,300) Excess warranty expense in financial income Taxable income 21,000 9,600 8,000 $839,200 $853,700 $958,700 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit 2025 Credit

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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Pharoah Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $849,000. $883,000 $961,000 Excess depreciation expense on tax return (30,800) (38,900) (10,300) Excess warranty expense in financial income Taxable income 21,000 9.600 8,000 $839,200 $853,700 $958,700 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit 2025 Credit
Transcribed Image Text:Pharoah Company has the following two temporary differences between its income tax expense and income taxes payable. 2025 2026 2027 Pretax financial income $849,000. $883,000 $961,000 Excess depreciation expense on tax return (30,800) (38,900) (10,300) Excess warranty expense in financial income Taxable income 21,000 9.600 8,000 $839,200 $853,700 $958,700 The income tax rate for all years is 20%. (a) Assuming there were no temporary differences prior to 2025, prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2025, 2026, and 2027. (List all debit entries before credit entries. Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. Record journal entries in the order presented in the problem.) Account Titles and Explanation Debit 2025 Credit
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