The accounting records of Sandhill Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers was $9,000. Equipment was acquired in early January for $321,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Sandhill used a 30% rate to calculate depreciation. 2. 3. Interest revenue on State of New York bonds totaled $3,800. Product warranties were estimated to be $51,600 in 2020. Actual repair and labor costs related to the warranties in 2020 were $10,100. The remainder is estimated to be paid evenly in 2021 and 2022. 4. 5. Gross profit on an accrual basis was $93,000. For tax purposes, $79,000 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $4,400. 7. Pretax financial income was $817,800. The tax rate is 30%.

The accounting records of Sandhill Inc. show the following data for 2020 (its first year of operations). 1. Life insurance expense on officers was $9,000. Equipment was acquired in early January for $321,000. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Sandhill used a 30% rate to calculate depreciation. 2. 3. Interest revenue on State of New York bonds totaled $3,800. Product warranties were estimated to be $51,600 in 2020. Actual repair and labor costs related to the warranties in 2020 were $10,100. The remainder is estimated to be paid evenly in 2021 and 2022. 4. 5. Gross profit on an accrual basis was $93,000. For tax purposes, $79,000 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $4,400. 7. Pretax financial income was $817,800. The tax rate is 30%.

Name: Prepare the journal entry for 2020 to record income taxes payable, in
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Description: Prepare the journal entry for 2020 to record income taxes payable, income tax expense, and deferred income taxes. (Creditaccount titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No En

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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