Question
The accounting records of Shinault Inc. show the following data for 2014. 1. Life insurance expense on officers was $8,400. 2. Equipment was acquired in
The accounting records of Shinault Inc. show the following data for 2014. 1. Life insurance expense on officers was $8,400. 2. Equipment was acquired in early January for $341,100. Straight-line depreciation over a 5-year life is used, with no salvage value. For tax purposes, Shinault used a 30% rate to calculate depreciation. 3. Interest revenue on State of New York bonds totaled $5,800. 4. Product warranties were estimated to be $59,000 in 2014. Actual repair and labor costs related to the warranties in 2014 were $16,400. The remainder is estimated to be paid evenly in 2015 and 2016. 5. Gross profit on an accrual basis was $102,000. For tax purposes, $84,800 was recorded on the installment-sales method. 6. Fines incurred for pollution violations were $6,500. 7. Pretax financial income was $771,400. The tax rate is 30%. Prepare the 2014 journal entry to record income taxes payable, income tax expense, and deferred income taxes.
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