Question
3. The information that follows pertains to Julia Company: Temporary differences for the year 2018 are summarized below. Expenses deducted in the tax return, but
3. The information that follows pertains to Julia Company: Temporary differences for the year 2018 are summarized below. Expenses deducted in the tax return, but not included in the income statement:
Depreciation $ 50,000
Prepaid expense $ 7,000
Expenses reported in the income statement, but not deducted in the tax return:
Warranty expense $ 8,000
(b.) No temporary differences existed at the beginning of 2018.
(c.) Pretax accounting income was $56,000 and taxable income was $7,000 for 2018.
(d.) There were no permanent differences.
(e.) The tax rate is 30%.
Required: Prepare the journal entry to record the tax provision for 2018. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
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