Cheyenne Services Ltd. follows ASPE and had earned accounting income before taxes of $493,000 for the year ended December 312020.During 2020, Cheyenne paid $82,000 for meals and entertainment expenses.In 2017, Cheyenne's tax accountant made a mistake when preparing the company's income tax return. In 2020, Cheyenne paid$10,400 in penalties related to this error. These penalties were not deductible for tax purposes.Cheyenne owned a warehouse building for which it had no current use, so the company chose to use the building as a rentalproperty. At the beginning of 2020, Cheyenne rented the building to Trung Inc. for two years at $62,700 per year. Trung paid theentire two years' rent in advance.Cheyenne used the straight-line depreciation method for accounting purposes and recorded depreciation expense of $303,500. Fortax purposes, Cheyenne claimed the maximum capital cost allowance of $453,900. This asset had been purchased at the beginningof the year for $3,024,000.In 2020, Cheyenne began selling its products with a two-year warranty against manufacturing defects. In 2020, Cheyenne accrued$308,400 of warranty expenses: actual expenditures for 2020 were $92,400 with the remaining $216,000 anticipated in 2021.In 2020, Cheyenne was subject to a 25% income tax rate. During the year, the federal government announced that tax rates wouldbe decreased to 23% for all future years beginning January 1, 2021.Prepare the journal entries to record current and future income taxes for 2020. (Credit account titles are automatically indented whenthe 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.)

Pay as you earn system or tax deduction at source in some countries are the advance tax payment…

Answered: Prepare the journal entries to record…

Business

Accounting

Prepare the journal entries to record current and future income taxes for 2020. (Credit account titles

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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