During its first year of operations ending on December 31, 2010, the Laredo Company reported pretax accounting income of $600, 000.The only difference between taxable income and accounting income was $80, 000 of accrued warranty costs.These warranty costs are expected to be paid as follows: $\begin{array}{rrrr}
&&\text { Enacted }\
\text { Year }&\text { Amount } & \text { Tax Rate }\
2010 & \$ 0 & 30 \% \
2011 & 60,000 & 35 \% \
2012 & 20,000 & 40 \%
\end{array}$
Assuming an income tax rate of 30% in 2010, Laredo should report income tax expense on its 2010 income statement in the amount of

Question

During its first year of operations ending on December 31, 2010, the Laredo Company reported pretax accounting income of $600, 000.The only difference between taxable income and accounting income was $80, 000 of accrued warranty costs.These warranty costs are expected to be paid as follows: $\begin{array}{rrrr}
&&\text { Enacted }\
\text { Year }&\text { Amount } & \text { Tax Rate }\
2010 & \$  0 & 30 \% \
2011 & 60,000 & 35 \% \
2012 & 20,000 & 40 \%
\end{array}$
 Assuming an income tax rate of 30% in 2010, Laredo should report income tax expense on its 2010 income statement in the amount of

Quizplus · Accepted Answer

The Answer of During its first year of operations ending on December 31, 2010, the Laredo Company reported pretax accounting income of $600, 000.The only difference between taxable income and accounting income was $80, 000 of accrued warranty costs.These warranty costs are expected to be paid as follows: $\begin{array}{rrrr}
&&\text { Enacted }\
\text { Year }&\text { Amount } & \text { Tax Rate }\
2010 & \$  0 & 30 \% \
2011 & 60,000 & 35 \% \
2012 & 20,000 & 40 \%
\end{array}$
 Assuming an income tax rate of 30% in 2010, Laredo should report income tax expense on its 2010 income statement in the amount of

During Its First Year of Operations Ending on December 31