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 S4,500 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 2019 2020 2021 2022 Revenues over deductions $25,000 $17,000 $18,000 $19,000 Warranty costs incurred (4,500) (4,500) (4.500) (4.500 > Taxable income 20,500 12,500 13,500 14,500 2022 Financial reporting 2019 2020 2021 Revenues over expenses $25,000 $17,000 $18,000 $19,000 Municipal interest income 5,000 -0- -0- Warranty expense accrued (18,000) --- -0- -0- Pretax financial income 12,000 17,000 18,000 19,000 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 Financial reporting 2019 2020 2021 2022 Revenues over expenses $25,000 $17,000 $18,000 $19,000 Municipal interest income 5,000 -0- -0- Warranty expense accrued (18.000) -- -0. Pretax financial income 12,000 17,000 18,000 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 19,000 2020 2021 2022 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 S4,500 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 2019 2020 2021 2022 Revenues over deductions $25,000 $17,000 $18,000 $19,000 Warranty costs incurred (4,500) (4,500) (4.500) (4.500 > Taxable income 20,500 12,500 13,500 14,500 2022 Financial reporting 2019 2020 2021 Revenues over expenses $25,000 $17,000 $18,000 $19,000 Municipal interest income 5,000 -0- -0- Warranty expense accrued (18,000) --- -0- -0- Pretax financial income 12,000 17,000 18,000 19,000 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 Financial reporting 2019 2020 2021 2022 Revenues over expenses $25,000 $17,000 $18,000 $19,000 Municipal interest income 5,000 -0- -0- Warranty expense accrued (18.000) -- -0. Pretax financial income 12,000 17,000 18,000 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 19,000 2020 2021 2022
