The following data represent the diffence between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $695,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following.  a. Capital cost allowance of $270,000 exceeded accounting depreciation expense of $157,000 in the current year.  b. Rents of $29,000, applicable to next year, had been collected in December and deferred for financial statement purposes but are taxable in the year received.  c. In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below:    ii. Warranty Expense for the Year         42,500 iii. Payments made to fulfill product warranties.     35,000    d. Insurance expense to cover the company's excutive officers was $7,500 for the year.  Required:  Prepare all the journal entries to record income taxes for Seafood imports.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The following data represent the diffence between accounting and tax income for Seafood Imports Inc., whose pre-tax accounting income is $695,000 for the year ended December 31. The company's income tax rate is 45%. Additional information relevant to income taxes includes the following. 

a. Capital cost allowance of $270,000 exceeded accounting depreciation expense of $157,000 in the current year. 

b. Rents of $29,000, applicable to next year, had been collected in December and deferred for financial statement purposes but are taxable in the year received. 

c. In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below: 

 

ii. Warranty Expense for the Year         42,500

iii. Payments made to fulfill product warranties.     35,000 

 

d. Insurance expense to cover the company's excutive officers was $7,500 for the year. 

Required: 

Prepare all the journal entries to record income taxes for Seafood imports. 

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