For year 1 and 2 record income tax expense journal entries.
Ch.16 Assignment i Saved Help Save & Exit Submit Check my work 3 0.5 points In its first year of operations, Martha Enterprises Corp. reported the following information: a. Income before income taxes was $670,000. b. The company acquired capital assets costing $2,700,000; depreciation was $157,000, and CCA was $135,000. c. The company recorded an expense of $170,000 for the one-year warranty on the company's products; cash disbursements amounted to $82,000. d. The company incurred development costs of $80,000 that met the criteria for capitalization for accounting purposes. Development work was still ongoing at year-end. These costs could be immediately deducted for tax purposes. e. The company made a political contribution of $33,000 and expensed this for accounting purposes. f. The income tax rate was 28% and the year 2 tax rate was enacted, at 30%. eBook In the second year, the company reported the following: a. Earnings before income tax were $1,730,000. b. Depreciation was $157,000; CCA was $390,000. c. The estimated warranty costs were $265,000, while the cash expenditure was $335,000. d. Additional development costs of $215,000 were incurred to complete the project. For accounting purposes, amortization of $51,000 was recorded. e. Golf club memberships for top executives cost $38,000; this was expensed for accounting purposes as a marketing expense. Required: 1. Prepare the journal entries to record income tax expense for the first and second years of operation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View ansaction list View journal entry worksheet No Transaction Account Title Debit Credit 1 Year 1 Income tax expense Deferred income tax Income tax payable 205,240 Ch.16 Assignment i Saved Help Save & Exit Submit Check my work 3 0.5 points In its first year of operations, Martha Enterprises Corp. reported the following information: a. Income before income taxes was $670,000. b. The company acquired capital assets costing $2,700,000; depreciation was $157,000, and CCA was $135,000. c. The company recorded an expense of $170,000 for the one-year warranty on the company's products; cash disbursements amounted to $82,000. d. The company incurred development costs of $80,000 that met the criteria for capitalization for accounting purposes. Development work was still ongoing at year-end. These costs could be immediately deducted for tax purposes. e. The company made a political contribution of $33,000 and expensed this for accounting purposes. f. The income tax rate was 28% and the year 2 tax rate was enacted, at 30%. eBook In the second year, the company reported the following: a. Earnings before income tax were $1,730,000. b. Depreciation was $157,000; CCA was $390,000. c. The estimated warranty costs were $265,000, while the cash expenditure was $335,000. d. Additional development costs of $215,000 were incurred to complete the project. For accounting purposes, amortization of $51,000 was recorded. e. Golf club memberships for top executives cost $38,000; this was expensed for accounting purposes as a marketing expense. Required: 1. Prepare the journal entries to record income tax expense for the first and second years of operation. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) View ansaction list View journal entry worksheet No Transaction Account Title Debit Credit 1 Year 1 Income tax expense Deferred income tax Income tax payable 205,240
