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Prepare the journal entry necessary to record income taxes at the end of 2022. What will Bonhomme report in the tax section of its 2022 income statement?

Prepare the journal entry necessary to record income taxes at the end of 2022. What will Bonhomme report in the tax section of its 2022 income statement?

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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M Assume that Bonhomme's 2022 pretax accounting income is $68,000 and that Bonhomme reports $25,000 more depreciation expense for tax purposes 2 than it shows in the accounting records, expected to reverse in 2025. Bonhomme estimates that warranty costs associated with sales in 2022 will be $36,000; Bonhomme incurred another $29,000 in warranty claims satisfied in 2022. Also during 2022, Bonhomme invested in tax-free municipal municipal bonds that earned $25,000 interest in 2022. A new tax law is enacted in 2022, increasing the tax rate from 21% in 2022 to 24% in 2023 and 25% in 2024 and thereafter. T Prepare the journal entry necessary to record income taxes at the end of 2022. What will Bonhomme report in the tax section of its 2022 income statement? B 9 10 11 32 d. e. N
Transcribed Image Text:M Assume that Bonhomme's 2022 pretax accounting income is $68,000 and that Bonhomme reports $25,000 more depreciation expense for tax purposes 2 than it shows in the accounting records, expected to reverse in 2025. Bonhomme estimates that warranty costs associated with sales in 2022 will be $36,000; Bonhomme incurred another $29,000 in warranty claims satisfied in 2022. Also during 2022, Bonhomme invested in tax-free municipal municipal bonds that earned $25,000 interest in 2022. A new tax law is enacted in 2022, increasing the tax rate from 21% in 2022 to 24% in 2023 and 25% in 2024 and thereafter. T Prepare the journal entry necessary to record income taxes at the end of 2022. What will Bonhomme report in the tax section of its 2022 income statement? B 9 10 11 32 d. e. N
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