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Taxable income and pretax financial income would be identical for Splish 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 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected Expenditures for warranties Taxable income 2024 $166,000 7.500 (4.800) $168.700 2025 $203.000 7,500 (4,800) $205,700 2026 $92,900 7.500 (4,800) $95.600 Provam

Taxable income and pretax financial income would be identical for Splish 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 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected Expenditures for warranties Taxable income 2024 $166,000 7.500 (4.800) $168.700 2025 $203.000 7,500 (4,800) $205,700 2026 $92,900 7.500 (4,800) $95.600 Provam

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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Taxable income and pretax financial income would be identical for Splish 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 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected Expenditures for warranties Taxable income Date Pretax financial income 2024 Excess of revenues over expenses (excluding two temporary differences) $166,000 Installment gross profit recognized Estimated cost of warranties Income before taxes 11.2004 (LAUS V 2024 $166,000 Account Titles and Explanation 7,500 Income Tax Exper (4.800) Ex $168.700 22.500 (14,400) $174.100 2025 2026 $203.000 $92,900 7,500 7.500 (4.800) (4,800) $205,700 $95,600 2025 Debit $203.000 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 fatare years. o 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 tities 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 0 for the amounts) o $200.000 2026 $92.900 o --0- $92.900 Credit
Transcribed Image Text:Taxable income and pretax financial income would be identical for Splish 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 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit collected Expenditures for warranties Taxable income Date Pretax financial income 2024 Excess of revenues over expenses (excluding two temporary differences) $166,000 Installment gross profit recognized Estimated cost of warranties Income before taxes 11.2004 (LAUS V 2024 $166,000 Account Titles and Explanation 7,500 Income Tax Exper (4.800) Ex $168.700 22.500 (14,400) $174.100 2025 2026 $203.000 $92,900 7,500 7.500 (4.800) (4,800) $205,700 $95,600 2025 Debit $203.000 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 fatare years. o 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 tities 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 0 for the amounts) o $200.000 2026 $92.900 o --0- $92.900 Credit
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