Prepare a tax provision:

TB

FACTS:

Taxpayer is an accrual method taxpayer.

Federal tax rate is 21%.

Taxpayer operates in one state, State A, which has a tax rate of 4%.

State A apportionment rate is 100%.

Taxpayer's operations generate a $100,000 FDII deduction.

Meals & Entertainment were subject to 50% disallowance.

Penalties were paid to the local government.

Federal depreciation is $400,000.

State A depreciation is $100,000.

Prepaid insurance is for a contract benefit period of 12 months, beginning January 1 of Year 2. Payment was made on December 1 of Year 1.

Accrued Vacation paid out by March 15 of Year 2 is $2,000.

Accrued Bonus paid out by March 15 of Year 2 is $10,000. However, the company deducts the Accrued Bonus as accrued.

The company does not addback life insurance premiums on their tax return or tax provision.

Prepare the income tax provision.

ASC 740 JE Check Difference Balance 4,154,605 198,390 (28,056) 1,450 30,388 1,000,000 (200,000) (50,398) (3,876) (2,589) (25,255) (50,000) (12,123) (5,000) (58,937) (6,899) (20,000) Adjusted 4,154,605 198,390 (28,056) 1,450 30,388 1,000,000 (200,000) (50,398) (3,876) (2,589) (25,255) (50,000) (12,123) (5,000) (58,937) (6,899) (20,000) Account Cash Accounts Receivable Bad Debt Allowance Prepaid Rent Prepaid Insurance Fixed Assets Accumulated Depreciation Accounts Payable FICA Withheld Federal Income Tax Withheld Accrued Wages Accrued Bonus Accrued Vacation Accrued Workers Compensation Deferred Compensation Property Taxes Accrued Warranty Current Tax Payable DTA (DTL) Noncurrent Tax Payable Note Payable Common Stock APIC Retained Eamings Revenue Sales Deductions and Allowances Vacation 401(k) Expense Salaries Payroll Taxes Depreciation Property Taxes Meals & Entertainment Workers Compensation Professional Fees Life Insurance Travel Rent Advertising Utilities M&E - Company Party Political Contributions Insurance Expense Interest Expense Miscellaneous Expense Fines & Penalties Income Taxes (1,000,000) (2,000) (20,000) (1,000,000) (2,000) (20,000) (5,000,000) 20,000 50,000 5,000 500,000 80,000 200,000 21,000 12,000 10,000 20,000 50,000 15,000 11,600 5,000 3,000 1,100 800 (5,000,000) 20,000 50,000 5,000 500,000 80,000 200,000 21,000 12,000 10,000 20,000 50,000 15,000 11,600 5,000 3,000 1,100 800 50,000 40,000 5,000 800 50,000 40,000 5,000 800 ASC 740 JE Check Difference Balance 4,154,605 198,390 (28,056) 1,450 30,388 1,000,000 (200,000) (50,398) (3,876) (2,589) (25,255) (50,000) (12,123) (5,000) (58,937) (6,899) (20,000) Adjusted 4,154,605 198,390 (28,056) 1,450 30,388 1,000,000 (200,000) (50,398) (3,876) (2,589) (25,255) (50,000) (12,123) (5,000) (58,937) (6,899) (20,000) Account Cash Accounts Receivable Bad Debt Allowance Prepaid Rent Prepaid Insurance Fixed Assets Accumulated Depreciation Accounts Payable FICA Withheld Federal Income Tax Withheld Accrued Wages Accrued Bonus Accrued Vacation Accrued Workers Compensation Deferred Compensation Property Taxes Accrued Warranty Current Tax Payable DTA (DTL) Noncurrent Tax Payable Note Payable Common Stock APIC Retained Eamings Revenue Sales Deductions and Allowances Vacation 401(k) Expense Salaries Payroll Taxes Depreciation Property Taxes Meals & Entertainment Workers Compensation Professional Fees Life Insurance Travel Rent Advertising Utilities M&E - Company Party Political Contributions Insurance Expense Interest Expense Miscellaneous Expense Fines & Penalties Income Taxes (1,000,000) (2,000) (20,000) (1,000,000) (2,000) (20,000) (5,000,000) 20,000 50,000 5,000 500,000 80,000 200,000 21,000 12,000 10,000 20,000 50,000 15,000 11,600 5,000 3,000 1,100 800 (5,000,000) 20,000 50,000 5,000 500,000 80,000 200,000 21,000 12,000 10,000 20,000 50,000 15,000 11,600 5,000 3,000 1,100 800 50,000 40,000 5,000 800 50,000 40,000 5,000 800