Nora Corp reports pre-tax accounting income of $250,000, but due to a difference between its actual warranty costs and those estimated for accounting purposes, taxable income is $280,000. At the beginning of the year, no temporary differences existed. The temporary difference is expected to reverse in the next year as actual warranty expenses incurred are expected to reach the warranty provision. Nora is subject to a corporate tax rate of 30%.
Instructions
Prepare the journal entry to record Nora's income taxes.

Question

Quizplus · Accepted Answer

The Answer of Nora Corp reports pre-tax accounting income of $250,000, but due to a difference between its actual warranty costs and those estimated for accounting purposes, taxable income is $280,000. At the beginning of the year, no temporary differences existed. The temporary difference is expected to reverse in the next year as actual warranty expenses incurred are expected to reach the warranty provision. Nora is subject to a corporate tax rate of 30%.
Instructions
Prepare the journal entry to record Nora's income taxes.

Nora Corp Reports Pre-Tax Accounting Income of $250,000, but Due