During its first year of operations ending on December 31, 2016, the Dakota 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: Assuming an income tax rate of 30% in 2016, what amount of income tax expense should Dakota report on its 2016 income statement?

Question

During its first year of operations ending on December 31, 2016, the Dakota 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:  Assuming an income tax rate of 30% in 2016, what amount of income tax expense should Dakota report on its 2016 income statement?

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The Answer of During its first year of operations ending on December 31, 2016, the Dakota 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:  Assuming an income tax rate of 30% in 2016, what amount of income tax expense should Dakota report on its 2016 income statement?

During Its First Year of Operations Ending on December 31