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The following data represent the differences between accounting and tax income for Green Food Imports Inc., whose pre-tax accounting income is $1,010,000 for the year
The following data represent the differences between accounting and tax income for Green Food Imports Inc., whose pre-tax accounting income is $1,010,000 for the year ended December 31 The company's income tax tate is 30% Additional information relevant to income taxes includes the following (Chick the icon to view the information ) Requirement Prepare the journal entries to record income taxes for Green Food Imports Before preparing the journal entries, let's compute Green Food's taxable income and taxes payable, accounting income for computing tax expense, temporary differences, and then deferred fax debits or credits required We'll begin with the computation of taxable income and taxes payable (Use a minus sign or parentheses for numbers to be subtracted for a taxable difference and/or for a deferred tax credit Enter a "O" for any zero balances For the temporary difference column, enter the net temporary difference for depreciation and CCA combined on the CCA line and enter the nel temporary difference for warranty expense and warranty payments combined on the warranty payments line) Deductible Taxable income (taxable Accounting income for computing More info and temporary Delorted Hem transaction taxes payable fax expense difference Tax rale debit (creo income before taxes a b Depreciation CCA Capital cost allowance of $230,000 exceeded accounting depreciation expense of $120,000 in the current year Rents of $15,000, applicable to next year had been collected in December and deferred for financial statement purposes but are taxable in the year received In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below C Unearned rent revenue S 101 000 Provision for warranties January 1 balance Provision for the year Payments made to fulfill product warranties 42.500 Warranty experise Warranty payments (35 000 Provision for warranties, December 31 balance S 108 500 d For tax purposes only actual amounts paid for warranties are deductible Insurance expense to cover the company's executive officers was $8.500 for the year and you have determined that this expense is not deductible for tax purposes The following data represent the differences between accounting and tax income for Green Food Imports Inc., whose pre-tax accounting income is $1,010,000 for the year ended December 31 The company's income tax tate is 30% Additional information relevant to income taxes includes the following (Chick the icon to view the information ) Requirement Prepare the journal entries to record income taxes for Green Food Imports Before preparing the journal entries, let's compute Green Food's taxable income and taxes payable, accounting income for computing tax expense, temporary differences, and then deferred fax debits or credits required We'll begin with the computation of taxable income and taxes payable (Use a minus sign or parentheses for numbers to be subtracted for a taxable difference and/or for a deferred tax credit Enter a "O" for any zero balances For the temporary difference column, enter the net temporary difference for depreciation and CCA combined on the CCA line and enter the nel temporary difference for warranty expense and warranty payments combined on the warranty payments line) Deductible Taxable income (taxable Accounting income for computing More info and temporary Delorted Hem transaction taxes payable fax expense difference Tax rale debit (creo income before taxes a b Depreciation CCA Capital cost allowance of $230,000 exceeded accounting depreciation expense of $120,000 in the current year Rents of $15,000, applicable to next year had been collected in December and deferred for financial statement purposes but are taxable in the year received In a previous year, the company established a provision for product warranty expense. A summary of the current year's transactions appears below C Unearned rent revenue S 101 000 Provision for warranties January 1 balance Provision for the year Payments made to fulfill product warranties 42.500 Warranty experise Warranty payments (35 000 Provision for warranties, December 31 balance S 108 500 d For tax purposes only actual amounts paid for warranties are deductible Insurance expense to cover the company's executive officers was $8.500 for the year and you have determined that this expense is not deductible for tax purposes
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