Chapter 17, Problem 17.13BE

Temporary Differences, Deferred Tax Asset. Using the information for Reflections Mirrors, Ltd provided in BE17-12, prepare the journal entries required to record the tax provision for Year 2 assuming that. Reflections reported income before warranty costs and taxes of $200,000 and incurred actual repair costs of $40,000. Assume that the firm did not accrue additional warranty costs in Year 2.