1. Accounting for Income Taxes

The accounting records of Taylor Incorporated show the following data for 2022. Taylor uses the accrual method of accounting for financial statements.

1. Life insurance expense on officers was $32,000.
2. Taylors CEO was killed in a plane crash. Taylor received $600,000 proceeds from a life insurance policy carried on the CEO.
3. Taylor uses the straight-line method to calculate depreciation for financial statements and the double-declining balance method to calculate depreciation for taxes. Double-declining balance depreciation for 2022 is $260,000. Straight-line depreciation is 180,000.
4. Interest revenue on State of New York bonds totaled $24,000.
5. Expenses incurred in obtaining State of New York bond income were $2,000.
6. Product warranties were estimated to be $72,000 in 2022. Actual repair and labor costs related to the warranties in 2022 were $24,000. The remainder is estimated to be paid evenly over the next two years.
7. Fines incurred for pollution violations were $30,000.
8. Taylor recognized $300,000 revenue on a long-term construction project. For tax purposes, $160,000 was recognized.
9. On November 1, 2022, Taylor paid $36,000 for one years insurance.
10. Pretax financial income was $2,200,000. The enacted tax rate is 22% for 2022 and 20% for all future years.

Instructions:

a. Compute taxable income and income taxes payable for 2022.

b. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2022.