Question 21

The records for Carla Vista Co. show this data for 2021:

		Gross profit on installment sales recorded on the books was $510,000. Gross profit from collections of installment receivables was $370,000.
		Life insurance on officers was $4,700.
		Machinery was acquired in January for $390,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Carla Vista may deduct 14% for 2021.
		Interest received on tax exempt Iowa State bonds was $9,900.
		The estimated warranty liability related to 2021 sales was $22,500. Repair costs under warranties during 2021 were $14,500. The remainder will be incurred in 2022.
		Pretax financial income is $690,000. The tax rate is 20%.

Prepare a schedule starting with pretax financial income and compute taxable income.

Schedule of Pretax Financial Income and Taxable Income for 2021:

Prepare the journal entry to record income taxes for 2021