The tax rates in effect are 2019, 40%; 2020 and 2021, 45%. All tax rates were enacted into law on January 1, 2019. No deferredincome taxes existed at the beginning of 2019. Taxable income is expected in all future years.Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, 2020, and 2021.(Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" forthe account titles and enter O for the amounts.)DateDec. 31.2019Dec. 31, 2020Account Titles and ExplanationDebitCredit Taxable income and pretax financial income would be identical for Whispering Co. except for its treatments of gross profit oninstallment sales and estimated costs of warranties. The following income computations have been prepared.Taxable incomeExcess of revenues over expenses (excluding two temporary differences)Installment gross profit collectedExpenditures for warrantiesTaxable incomePretax financial income:Excess of revenues over expenses (excluding two temporary differences)Installment gross profit recognizedEstimated cost of warrantiesIncome before taxes2019$154,0008,500(5.500 )$157,0002019$154,00025,500(16,500)$163,0002020$215,0008,500(5,500)$218,0002020$215,000-0--0-$215,0002021$93,5008,500(5,500)$96,5002021$93,500-0--0-$93,500

Deferred income taxes When there is a difference arises between taxation records and accounting…

The tax rates in effect are 2019, 40 % ; 2020 and 2021, 45%. All tax rates were enacted into law on January 1, 2019. No deferred income taxes existed at the beginning of 2019. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, 2020, and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Dec. 31.2019 Dec. 31, 2020 Account Titles and Explanation Debit Credit

The tax rates in effect are 2019, 40 % ; 2020 and 2021, 45%. All tax rates were enacted into law on January 1, 2019. No deferred income taxes existed at the beginning of 2019. Taxable income is expected in all future years. Prepare the journal entry to record income tax expense, deferred income taxes, and income taxes payable for 2019, 2020, and 2021. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) Date Dec. 31.2019 Dec. 31, 2020 Account Titles and Explanation Debit Credit

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter18: Accounting Periods And Methods

Section: Chapter Questions

Problem 31CE

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