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please show work so i know how to work the problem to correctly get the right answer. Q2. In its 2019 financial accounting income, Jasper
please show work so i know how to work the problem to correctly get the right answer.
Q2. In its 2019 financial accounting income, Jasper Inc. reports municipal bond interest income of $5,000 and warranty expense of $18,000. For tax purposes, the municipal bond interest is non-taxable and the warranty costs are deducted at the rate of $4,500 per year as the costs are incurred. Jasper has no other differences between PTFI and TI over the four-year period. The table below summarizes tax and financial income for Jasper from 2019 to 2022: Tax reporting Revenues over deductions Warranty costs incurred Taxable income 2019 $25,000 (4,500) 20,500 2020 $17,000 (4,500) 12,500 2021 2022 $18,000 $19,000 (4,500) (4,500) 13,500 14,500 Financial reporting Revenues over expenses Municipal interest income Warranty expense accrued Pretax financial income 2019 $25,000 5,000 (18,000) 12,000 2020 $17,000 -0- 2021 2022 $18,000 $19,000 -0- -0- 18,000 19,000 17,000 Assume an enacted tax rate of 30% for 2019, and 20% for all later years. These rates are known on 1/1/2019. Make journal entries related to taxes for all years. Show supporting calculations for each entry. 2019 2020 2021 2022Step by Step Solution
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