CH16 (8.)

Allmond Corporation, organized on January 3, 2018, had pretax accounting income of $17 million and taxable income of $28 million for the year ended December 31, 2018. The 2018 tax rate is 30%. The only difference between accounting income and taxable income is estimated product warranty costs. Expected payments and scheduled tax rates (based on recent tax legislation) are as follows:

2019	$	4 million	25	%
2020		2 million	25	%
2021		2 million	25	%
2022		3 million	20	%

Required: 1. Determine the amounts necessary to record Allmonds income taxes for 2018 and prepare the appropriate journal entry.

Required 1 Calculation Required 1 GJ Required 2 Determine the amounts necessary to record Allmond's income taxes for 2018. (Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). Enter all amounts as positive values.) Tax Rate Tax $ Recorded as: % ($ in millions) S 17.0 8.4 28.0 x 28.0 X 30% 17% = = S S X X 4.8 Pretax accounting income Warranty costs reversing in: 2019 2020 2021 2022 Total deferred tax amount Income taxable in current year 13.2 S 73.0