Question
In 2023, Waterway Ltd., which follows IFRS, reported accounting income of $330,000 and the 2023 tax rate was 18%Waterway had two timing differences for tax
In 2023, Waterway Ltd., which follows IFRS, reported accounting income of $330,000 and the 2023 tax rate was 18%Waterway had two timing differences for tax purposes: CCA on the company's tax return was $365,400. Depreciation expense on the financial statements was $242,000. Accrued warranty expense for financial statement purposes was $82,300 (accrued expenses are not deductible for tax purposes). This is the first year Waterway offers warranties Both of these timing differences are expected to fully reverse over the next four years, as follows: Depreciation Difference Warranty Expense YearRate 2024$ 41,100 $10,600 17% 2025 36,30015,10017% 2026 25,10026,500 15% 202720,900 30,100 15% $ 123,400 $82,300 ( a ) Calculate income taxes payable for 2023 Income taxes payable ( b ) Prepare the journal entry to record current income taxes for 2023 ( c ) Prepare the journal entry to record deferred income taxes for 2023.
Your answer is correct. Calculate income taxes payable for 2023. Income taxes payable $ Prepare the journal entry to record current income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) Prepare the journal entry to record deferred income taxes for 2023. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.)Step by Step Solution
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