Installment sales are a normal part of Cascada's operations. The depreciation expense is related to a building costing $1,550,000. Income before including any of the book-tax differences above is $905,000. Deferred tax assets are expected to be fully realized and, as a result, no allowance account is needed. Cascada is subject to a 40% income tax rate.

Prepare the journal entry(ies) necessary to record the effects of a tax-rate reduction from 40% to 34% effective the beginning of Year 2.

Cascada Enterprises provided the following information regarding book-tax differences for its first year of operations: E: (Click the icon to view the book-tax differences.) Installment sales are a normal part of Cascada's operations. The depreciation expense is related to a building costing $1,550,000. Income before including any of the book-tax differences above is $905,000. Deferred tax assets are expected to be fully realized and, as a result, no allowance account is needed. Cascada is subject to a 40% income tax rate. Requirement Prepare the journal entry(ies) necessary to record the effects of a tax-rate reduction from 40% to 34% effective the beginning of Year 2. (Record debits first, then credits. Exclude explanations from any journal entries.) i Data Table $ Source of Book-Tax Difference Installment sales: Income recognized 2-year warranty Costs: Warranty expense Depreciation expense GAAP 504,000 $ 61,000 86,000 Tax 118,000 45,000 132,000 Print Done