Taxable income and pretax financial income would be identical for Sweet 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 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit collected 8,000 8,000 8,000 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $168,800 $214,800 $100,700 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $174,400 $212,000 $97,900 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
Taxable income and pretax financial income would be identical for Sweet 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 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit collected 8,000 8,000 8,000 Expenditures for warranties Taxable income (5,200) (5,200) (5,200) $168,800 $214,800 $100,700 Pretax financial income 2024 2025 2026 Excess of revenues over expenses (excluding two temporary differences) $166,000 $212,000 $97,900 Installment gross profit recognized 24,000 -0- -0- Estimated cost of warranties (15,600) -0- -0- Income before taxes $174,400 $212,000 $97,900 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Taxable income and pretax financial income would be identical for Sweet 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
2024
2025
2026
Excess of revenues over expenses (excluding two temporary differences)
$166,000
$212,000
$97,900
Installment gross profit collected
8,000
8,000
8,000
Expenditures for warranties
Taxable income
(5,200)
(5,200)
(5,200)
$168,800
$214,800
$100,700
Pretax financial income
2024
2025
2026
Excess of revenues over expenses (excluding two temporary differences)
$166,000
$212,000
$97,900
Installment gross profit recognized
24,000
-0-
-0-
Estimated cost of warranties
(15,600)
-0-
-0-
Income before taxes
$174,400
$212,000
$97,900
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
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