Intermediate Accounting
1st Edition
ISBN: 9780132162302
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 17, Problem 17.6E
Temporary Differences,
| Current Year | ||
| Account | GAAP | Tax |
| Sales | $500,000 | $500,000 |
| Operating expenses | (280,000) | (280.000) |
| (70,000) | (100,000) | |
| Estimated warranty cost | (30,000) | 0 |
| Actual warranty repairs | 0 | (10,000) |
| Income before tax | $120,000 | |
| Taxable income | $110,000 | |
| Tax rate | × 35% | |
| Tax payable | $38,500 | |
Required
- a. Prepare the
journal entry to record the tax provision for the current year - b. Are there any differences between the federal income tax rate and Fortunes’ effective tax rate? Explain.
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Chapter 17 Solutions
Intermediate Accounting
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