The accounting records of Sandhill Inc. show the following data for 2020 (its frst year of operation: 1. Life insurance expense on officers was $9,000. Equipment was acquired in early January for $321,000. Straight-line depreciation over a 5- 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 re 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 th 6. Fines incurred for pollution violations were $4,400. 7. Pretax financial income was $817,800. The tax rate is 30%.

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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%.
Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020.
Cak.
Transcribed Image Text: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%. Prepare a schedule starting with pretax financial income in 2020 and ending with taxable income in 2020. Cak.
Schedule of Pretax Financial Income
and Taxable Income for 2020
Pretax financial income
Permanent differences
Temporary differences
Taxable income
%24
>
>
>
>
>
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Transcribed Image Text:Schedule of Pretax Financial Income and Taxable Income for 2020 Pretax financial income Permanent differences Temporary differences Taxable income %24 > > > > > >
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