On 31 December 2019, Niu Ford estimated its warranty costs on the sale of cars to be K500,000, to be paid evenly over the next 2 years. The company recorded these estimated warranty costs by debiting Warranty Expense and crediting Provisions for Warranty on 31 December 2019.

Required:

a.Assuming the tax rate of 30%, record the income tax effect of this entry for the year ended 31 December 2011, and for the next 2 years if warranty cost of K500,000 are incurred evenly over those years. Assume no further additions to Provisions for Warranty.