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The records for Sheridan Co. show this data for 2021: Gross profit on installment sales recorded on the books was $380,000. Gross profit from collections
The records for Sheridan Co. show this data for 2021:
Gross profit on installment sales recorded on the books was $380,000. Gross profit from collections of installment receivables was $240,000. | ||
Life insurance on officers was $3,400. | ||
Machinery was acquired in January for $260,000. Straight-line depreciation over a ten-year life (no salvage value) is used. For tax purposes, MACRS depreciation is used and Sheridan may deduct 14% for 2021. | ||
Interest received on tax exempt Iowa State bonds was $8,600. | ||
The estimated warranty liability related to 2021 sales was $21,200. Repair costs under warranties during 2021 were $13,200. The remainder will be incurred in 2022. | ||
Pretax financial income is $560,000. The tax rate is 20%. |
Prepare a schedule starting with pretax financial income and compute taxable income.
Prepare the journal entry to record income taxes for 2021
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