The records for Ivanhoe Co. show this data for 2021: ● Gross profit on installment sales recorded on the books was $460,000. Gross profit from collections of installment receivables was $320,000. ● Life insurance on officers was $4,200. ● Machinery was acquired in January for $340,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Ivanhoe may deduct 14% for 2021. ● Interest received on tax exempt Iowa State bonds was $9,400. ● The estimated warranty liability related to 2021 sales was $22,000. Repair costs under warranties during 2021 were $14,000. The remainder will be incurred in 2022. ● Pretax financial income is $640,000. The tax rate is 20%. Prepare a schedule starting with pretax financial income and compute taxable income. Schedule of Pretax Financial Income and Taxable Income for 2021 $ $ Prepare the journal entry to record income taxes for 2021. Account Titles and Explanation Debit Credit
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