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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

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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The accounting records of Metlock Inc. show the following data for 2020 (its first year of operations. 1. Life insurance expense on officers was $8,300. Equipment was acquired in carly January for $308,000. Straight-line depreciation over a 5-year life is used, with no salvaga value. For tax purposes, Metlock used a 30% rate to calculate depreciation. 2. 3. Intsrest revenus on State of Naw York bonds totaled $3,600. 4. Product warranties were estimated to be $54,600 in 2020. Actual repair and iabor costs related to the warranties in 2020 were $11,000. The remainder is estimated to be paid evenly in 2021 and 2022. Gross profit on an accrual basis was $108,000. For tax purposes, $72,700 was recorded on the installment-sales method. Fines incurred for pollution violations were $3,800. 5. 6. 7. Pretax financial income was $751,800. The tax rats is 30 Prepare a schedula starting with pretax financial incoms in 2020 and ending with taxable income in 2020. Schedule of Pretax Financial Income and Taxable Income for 2020 Pretax financial income Permanent differences Tamporary differences Taxable income e Textbook and Medla List of Accounts Prepare the journal antry for 2020 to record income taxas payable, incoma tax expense, and deferred income taxas. (Credit acount titles are automaticaly 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) Account Titles and Explanation Debit Credit
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 was $8,300. Equipment was acquired in carly January for $308,000. Straight-line depreciation over a 5-year life is used, with no salvaga value. For tax purposes, Metlock used a 30% rate to calculate depreciation. 2. 3. Intsrest revenus on State of Naw York bonds totaled $3,600. 4. Product warranties were estimated to be $54,600 in 2020. Actual repair and iabor costs related to the warranties in 2020 were $11,000. The remainder is estimated to be paid evenly in 2021 and 2022. Gross profit on an accrual basis was $108,000. For tax purposes, $72,700 was recorded on the installment-sales method. Fines incurred for pollution violations were $3,800. 5. 6. 7. Pretax financial income was $751,800. The tax rats is 30 Prepare a schedula starting with pretax financial incoms in 2020 and ending with taxable income in 2020. Schedule of Pretax Financial Income and Taxable Income for 2020 Pretax financial income Permanent differences Tamporary differences Taxable income e Textbook and Medla List of Accounts Prepare the journal antry for 2020 to record income taxas payable, incoma tax expense, and deferred income taxas. (Credit acount titles are automaticaly 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) Account Titles and Explanation Debit Credit
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