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Taxable income and pretax financial income would be identical for Huber Co. except for its treatments of gross profit on Installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit collected 8,000 8.000 8,000 Expenditures for warranties Taxable income (5,000) (5,000) (5,000) $163,000 $213,000 $93,000 Pretax financial Income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties Income before taxes (15,000) $169,000 $210,000 -0- -0- $90,000 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (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.) Date Account Titles and Explanation 1, 2024 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 11.2025 V Income Tax Expense Debit 67900 4500 94500 Deferred Tax Liability 3600 Credit 65200 7200

Taxable income and pretax financial income would be identical for Huber Co. except for its treatments of gross profit on Installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit collected 8,000 8.000 8,000 Expenditures for warranties Taxable income (5,000) (5,000) (5,000) $163,000 $213,000 $93,000 Pretax financial Income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties Income before taxes (15,000) $169,000 $210,000 -0- -0- $90,000 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (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.) Date Account Titles and Explanation 1, 2024 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 11.2025 V Income Tax Expense Debit 67900 4500 94500 Deferred Tax Liability 3600 Credit 65200 7200

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter3: Taxes On The Financial Statements
Section: Chapter Questions
Problem 24P
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Taxable income and pretax financial income would be identical for Huber Co. except for its treatments of gross profit on Installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit collected 8,000 8.000 8,000 Expenditures for warranties Taxable income (5,000) (5,000) (5,000) $163,000 $213,000 $93,000 Pretax financial Income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties Income before taxes (15,000) $169,000 $210,000 -0- -0- $90,000 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (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.) Date Account Titles and Explanation 1, 2024 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 11.2025 V Income Tax Expense Debit 67900 4500 94500 Deferred Tax Liability 3600 Credit 65200 7200
Transcribed Image Text:Taxable income and pretax financial income would be identical for Huber Co. except for its treatments of gross profit on Installment sales and estimated costs of warranties. The following income computations have been prepared. Taxable income 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit collected 8,000 8.000 8,000 Expenditures for warranties Taxable income (5,000) (5,000) (5,000) $163,000 $213,000 $93,000 Pretax financial Income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $160,000 $210,000 $90,000 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties Income before taxes (15,000) $169,000 $210,000 -0- -0- $90,000 The tax rates in effect are 2024, 20%; 2025 and 2026, 25%. All tax rates were enacted into law on January 1, 2024. No deferred income taxes existed at the beginning of 2024. Taxable income is expected in all future years. Prepare the journal entries to record income tax expense, deferred income taxes, and income taxes payable for 2024, 2025, and 2026. (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.) Date Account Titles and Explanation 1, 2024 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability 11.2025 V Income Tax Expense Debit 67900 4500 94500 Deferred Tax Liability 3600 Credit 65200 7200
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