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6 Current Attempt in Progress Taxable income and pretax financial income would be identical for Skysong Co.except for its treatments of gross profit on installment
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Current Attempt in Progress Taxable income and pretax financial income would be identical for Skysong Co.except for its treatments of gross profit on installment sales and estimated costs of warranties. The following income computations have been prepared. 2019 2020 2021 $163,000 $221,000 $94.900 Taxable income Excess of revenues over expenses (excluding two temporary differences) Installment gross pront collected Expenditures for warranties Taxable income 8,400 8.400 8.400 (5.200) (5.200) (5,200) $166,200 $224,200 $98.100 Pretax financial income 2019 2020 2021 $163,000 $221.000 $94.900 Excess of revenues over expenses (excluding two temporary differences) Installment gross profit recognized Estimated cost of warranties Income before taxes -0- -0 25,200 (15,600) $172,600 0 0 $221.000 $94,900 The tax rates in effect are 2019, 40%; 2020 and 2021,45%. All tax rates were enacted into law on January 1, 2019. No deferred income taxes existed at the beginning of 2019. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, 2020 and 2021. (Credit account titles are automatically indented when amount is entered. Do not Indent manually. If no entry is required, select "No Entry for the account titles and enter for the amounts.) Date Account Titles and Explanation Debit Credit Dec 31, 2019 Income Tax Expense Deferred Tax Asset for the Date Account Titles and Explanation Debit Credit Dec 31, 2019 Income Tax Expense Deferred Tax Asset Income Tax Payable Deferred Tax Liability Dec 31, 2020 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset Dec 31, 2021 Income Tax Expense Deferred Tax Liability Income Tax Payable Deferred Tax Asset Step by Step Solution
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