Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Q.4 (20 points) The accounting records of Perkins Inc. show the following data for 2019. Pretax financial income was $640,000. Life insurance expense on officers

image text in transcribed

Q.4 (20 points) The accounting records of Perkins Inc. show the following data for 2019. Pretax financial income was $640,000. Life insurance expense on officers was $16,000. Equipment was acquired in early January for $450,000, straight-line depreciation over 5 year life is used, with no salvage value. For tax purposes, Perkins Inc. used a 40% rate to calculate depreciation. Product warranties were estimated to be $75,000 in 2018. Actual repair and labor costs related to the warranties in 2019 were $15,000 and the remainder is estimated to be paid evenly in 2029 and 2021. Sales on an accrual basis were $160,000. For tax purposes, $90,000 was recorded on the installment sales method. Fines incurred for pollution violations were $3,600. The tax rate is 30%. Required: Prepare the journal entries related to Deferred Tax in 2019

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

How To Audit Learn How To Become An Auditor

Authors: Mireya Knolton

1st Edition

B097KPLYBF, 979-8524922564

More Books

Students also viewed these Accounting questions