The accounting records of Metiock Inc show the following data for 2020 (its first year of operations. 1. Life insurance expanse on officers was $8.300. 2. Eauipment was acouired in early January for $308.000. Straight-line depreciation over a 5year life is used, vwith no salvage valua For tax purposes, Metlock used a 306 rate to calculate depreciation 3. Interest revanue on State of New York bonds totaled S3.600. 4. Product varranties were estimatad to be S54600 in 2020. Actual repair and labor costs related to the varranties in 2020 were $11.000. The remainder is estimated to be paid evenly in 2021 and 2022 5. Gross profit on an acrual basis was $108.000. For tax purposes, $72.700 was racorded on the installment-sales mathod. 6. Fines incurred for pollution vialations were $2.800. 7. Pretax financial income vas $751,800. The tax rata is 206. Prepare a schedule starting with pretax financial income in 2020 and ending with tavable income in 2020. Schedule of Pretax Financial Income and Taxable Income for 2020 Pretax financial income Permanent dfferences Tamporary differences Tavabla incoma eTextbook and Medla List of Accounts Prepare the journal entry for 2020 to record incoma tavas payable, income tax expense, and deferred income tavas. Credit account titles are automaticaly indented when amount is entered. Do net indent manually ifno entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Debit Credit
The accounting records of Metiock Inc show the following data for 2020 (its first year of operations. 1. Life insurance expanse on officers was $8.300. 2. Eauipment was acouired in early January for $308.000. Straight-line depreciation over a 5year life is used, vwith no salvage valua For tax purposes, Metlock used a 306 rate to calculate depreciation 3. Interest revanue on State of New York bonds totaled S3.600. 4. Product varranties were estimatad to be S54600 in 2020. Actual repair and labor costs related to the varranties in 2020 were $11.000. The remainder is estimated to be paid evenly in 2021 and 2022 5. Gross profit on an acrual basis was $108.000. For tax purposes, $72.700 was racorded on the installment-sales mathod. 6. Fines incurred for pollution vialations were $2.800. 7. Pretax financial income vas $751,800. The tax rata is 206. Prepare a schedule starting with pretax financial income in 2020 and ending with tavable income in 2020. Schedule of Pretax Financial Income and Taxable Income for 2020 Pretax financial income Permanent dfferences Tamporary differences Tavabla incoma eTextbook and Medla List of Accounts Prepare the journal entry for 2020 to record incoma tavas payable, income tax expense, and deferred income tavas. Credit account titles are automaticaly indented when amount is entered. Do net indent manually ifno entry is required, select "No Entry" for the account titles and enter O for the amounts) Account Titles and Explanation Debit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The accounting records of Metlock Inc. show the following data for 2020 (its first year of operations):
1. **Life Insurance Expense on Officers**: $9,600.
2. **Equipment Depreciation**: Equipment was acquired in January for $300,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Metlock used a 30% rate to calculate depreciation.
3. **Interest Revenue on State of New York Bonds**: $3,600.
4. **Product Warranties**: Estimated to be $54,600 in 2020. Actual repair and labor costs related to the warranties in 2020 were $15,600. The remainder is expected to be paid evenly in 2021 and 2022.
5. **Gross Profit on an Accrual Basis**: $108,000. For tax purposes, $72,700 was recorded on the installment-sales method.
6. **Fines Incurred for Pollution Violations**: $12,800.
7. **Pretax Financial Income**: $751,800. The tax rate is 20%.
**Schedule of Pretax Financial Income and Taxable Income for 2020**
- **Pretax Financial Income**: [User Input Required]
**Permanent Differences**
- [Dropdown for selecting type]
- [User Input for amount]
**Temporary Differences**
- [Dropdown for selecting type]
- [User Input for amount]
- **Taxable Income**: [Calculated based on entries]
**Instructional Elements**
- **eTextbook and Media**: [Interactive Button]
- **List of Accounts**: [Interactive Button]
**Journal Entry Preparation for 2020**
Prepare the journal entry for 2020 to record:
- Income taxes payable
- Income tax expense
- Deferred income taxes
(Note: Credit account titles are automatically indented when the amount is entered. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts.)
**Account Titles and Explanation**
| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
| [User Input] | [ ] | [ ] |
| [User Input] | [ ] | [ ] |
| [User Input] | [ ] | [ ] |
This educational material offers a detailed](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1a584db2-96e8-4633-814b-2d7714080714%2Fc2aa6b86-7bdb-4c8b-83ca-6c5ac9a8b33e%2Fl70ugqh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The accounting records of Metlock Inc. show the following data for 2020 (its first year of operations):
1. **Life Insurance Expense on Officers**: $9,600.
2. **Equipment Depreciation**: Equipment was acquired in January for $300,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Metlock used a 30% rate to calculate depreciation.
3. **Interest Revenue on State of New York Bonds**: $3,600.
4. **Product Warranties**: Estimated to be $54,600 in 2020. Actual repair and labor costs related to the warranties in 2020 were $15,600. The remainder is expected to be paid evenly in 2021 and 2022.
5. **Gross Profit on an Accrual Basis**: $108,000. For tax purposes, $72,700 was recorded on the installment-sales method.
6. **Fines Incurred for Pollution Violations**: $12,800.
7. **Pretax Financial Income**: $751,800. The tax rate is 20%.
**Schedule of Pretax Financial Income and Taxable Income for 2020**
- **Pretax Financial Income**: [User Input Required]
**Permanent Differences**
- [Dropdown for selecting type]
- [User Input for amount]
**Temporary Differences**
- [Dropdown for selecting type]
- [User Input for amount]
- **Taxable Income**: [Calculated based on entries]
**Instructional Elements**
- **eTextbook and Media**: [Interactive Button]
- **List of Accounts**: [Interactive Button]
**Journal Entry Preparation for 2020**
Prepare the journal entry for 2020 to record:
- Income taxes payable
- Income tax expense
- Deferred income taxes
(Note: Credit account titles are automatically indented when the amount is entered. If no entry is required, select "No Entry" for the account titles and enter "0" for the amounts.)
**Account Titles and Explanation**
| Account Titles and Explanation | Debit | Credit |
|--------------------------------|-------|--------|
| [User Input] | [ ] | [ ] |
| [User Input] | [ ] | [ ] |
| [User Input] | [ ] | [ ] |
This educational material offers a detailed
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education