Jenny Corporation recorded warranty accruals as at December 31, 2017 in the amount of $150,000. This reversing

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Jenny Corporation recorded warranty accruals as at December 31, 2017 in the amount of $150,000. This reversing difference will cause deductible amounts of $50,000 in 2018, $35,000 in 2019, and $65,000 in 2020. Jenny's accounting income for 2017 is $135,000 and the tax rate is 25% for all years. There are no deferred tax accounts at the beginning of 2017.
Instructions
(a) Calculate the deferred tax balance at December 31, 2017.
(b) Calculate taxable income and current income tax payable for 2017.
(c) Prepare the journal entries to record income taxes for 2017.
(d) Prepare the income tax expense section of the income statement for 2017, beginning with the line "Income before income tax."
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-1119048541

11th Canadian edition Volume 2

Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy

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