The information that follows pertains to Esther Food Products: At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation $ 62,000 Prepaid expenses 26,000 Warranty expenses (8,000) No temporary differences existed at the beginning of 2024. Pretax accounting income was $103,000 and taxable income was $23,000 for the year ended December 31, 2024. The tax rate is 25 % . Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024.

The information that follows pertains to Esther Food Products: At December 31, 2024, temporary differences were associated with the following future taxable (deductible) amounts: Depreciation $ 62,000 Prepaid expenses 26,000 Warranty expenses (8,000) No temporary differences existed at the beginning of 2024. Pretax accounting income was $103,000 and taxable income was $23,000 for the year ended December 31, 2024. The tax rate is 25 % . Required: Complete the following table given below and prepare the appropriate journal entry to record income taxes for 2024.

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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Concept explainers

Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.

Question

The information that follows pertains to Esther Food Products: At December 31, 2024, temporary differences
were associated with the following future taxable (deductible) amounts: Depreciation $ 62,000 Prepaid
expenses 26,000 Warranty expenses (8, 000) No temporary differences existed at the beginning of 2024.
Pretax accounting income was $103,000 and taxable income was $23,000 for the year ended December
31, 2024. The tax rate is 25 % . Required: Complete the following table given below and prepare the
appropriate journal entry to record income taxes for 2024.

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